Well it really does depend on the nature of the judgement, but for the purposes of this note I’ll refer only to those civil agreements where a breach has occurred through non-payment of consumer credit debts. Such debts may include, but are not imited to, credit and store card agreements and / or personal loans.

Now that they’ve obtained judgement the creditor is quite within his right to seek to enforce the debt by asking the court to issue any one of the following:

• A Warrant of Execution;
• An Attachment of Earnings Order;
• A Third Party Debt Order; or
• A Charging Order

In addition to those items mentioned, on debts greater than £750 the creditor can also issue something called a Statutory Demand, which in essence is their own interim Order for the payment of any outstanding debt. The Statutory Demand is a formal notice that could lead to a petition for bankruptcy being made.

All of the above remedies (with exception to the Statutory Demand) require the seperate completion of an application form, and all require additional payment of fees.

Warrant of Execution:

This is where a court appointed bailiff will make attempts to seize goods from your home to the value of the debt (unless the debt is greater than £5,000 and NOT a regulated credit agreement under the Consumer Credit Act 1974). Any goods seized will be sold at auction for a mere fraction of the price you paid but there are important things that you might wish to know:

1. A bailiff cannot force entry into your home so under no circumstances should you invite him in.
2. If nobody is home then the bailiff CAN gain rightful and legal entry via an unlocked door or window.
3. Where a bailiff has previously gained legal entry, he is able to ‘force’ entry on his return.
4. A number of items cannot be seized which include ‘tools of your trade’ and essential household furniture items.
5. All but the most determined court appointed bailiff will almost certainly give up after 3-5 attempts.

Attachment of Earnings Order:

This must be the enforcement option of choice for aggrieved creditors but there are circumstances where an Attachment of Earnings Order will not be suitable or even available:

1. You must be ‘Employed’ by someone.
2. You must not be Self Employed, Unemployed or Employed by the Armed Forces.
3. Your living expenses must be less than your earnings.

Third Party Debt Order:

This is an Order made and presented to your bank or building society to freeze your account and make payments under the judgement. In order for the creditor to seek this remedy he must be aware of any savings you might have in your ‘known’ accounts. This is very unlikely because I know of no institution that might disclose such information in contravention of the Data Protection Act.

Also, as you would know well in advance about such an Order it is likely that you would cease any payments to your account and instead open up or utilise a different account.

Charging Order:

A Charging Order is a legal document that prevents the sale of an asset such as your home, until the debt has been paid. In extremely limited circumstances the creditor can apply to have a forced sale but in truth this is seldom sought and even rarer given.

If you are a homeowner then this is the one to watch out for.

Statutory Demand:

This is where it gets serious for both sides and is often used by Debt Collection Agencies to call your bluff. A statutory demand gives the recipient 18 days to apply to have the demand set aside, or 21 days to pay the debt in full.

The demand must be served upon the debtor so lets think about this for a moment:

1. Who served the statutory demand?
2. If posted, was the demand signed for (i.e. recorded / special delivery)?
3. Can the creditor ‘prove’ that the demand was indeed served upon you?
4. Are all the details of the Statutory Demand ‘factual’?

Interestingly, more and more debt collection company’s are using this as a scare tactic to force you into agreeing some form of payment. However, there are certain ’stringent’ requirements that must be adhered to in order for there to be any chance of the creditor succeeding in making you bankrupt.

My experience to date with statutory demands is that they are simply being used as the latest form of scare mongering tactics. In order for the creditor to make you bankrupt there must be an underlying reason for doing so because, once made bankrupt, the whole of the debt (along with all the costs of enforcing your bankruptcy) will die. As you can see then, this is merely a form of ’spite’ reaction to an unpaid debt, one which is seldom acted upon in reality, and one that should be treated with the contempt it deserves.

Also, consider this.

The creditor going for bankruptcy would be turned down his application if another remedy might have been available. So, would it be possible for the creditor to obtain judgement first? If this is the case, and let’s be realistic here, if you have failed to pay a debt under your contractual agreement then it is likely that the creditor WOULD get some form of judgement for non-payment of said debt, then an application to make you bankrupt is highly unlikely to have any chance in court.

So why would a creditor wish to do this?

Well, I’ll say in the main it is to call your bluff, but there are certain legitimate reasons for going down this route which include:

1. Preventing you from running your own limited company.
2. Preventing you from trading in certain occupations such as Estate Agency and Pub Licensee.

I hope to have cleared one or two things up there and as always, if you have any questions then please complete the relevant enquiry forms.

Andy.