Whether you’re a business or an individual, getting paid money which you are owed is important.

But going through the court process and winning your debt claim doesn’t necessarily mean the debtor will pay you.

For one reason or another, debtors often fail to pay, meaning you are left in the position of having to decide what to do next. It is here that many people can feel tempted to give up, as it often feels that trying to enforce a debt will just be a waste of time and money.

Whilst this is understandable, people underestimate the range of options available to them if they wish to enforce an unpaid debt.

What options are there when enforcing a debt?

When looking to enforce a debt, you have several options to explore. These include:

Instructing a Bailiff / High Court Enforcement Agent

This is one of the most well-known enforcement options. It involves either a Bailiff (if a debt is in the County Court) or a High Court Enforcement Agent (if a debt is in / has been transferred to the High Court) attending at the debtor’s premises and trying to secure payment.

If this is not possible, then the Bailiff / Agent can take control of the debtor’s goods, and which itself usually prompts payment by the debtor, or alternatively a payment plan being entered into.

Any seized goods can also be sold, with the proceeds going towards the costs of enforcement, as well as the unpaid debt itself.

Whilst this can be the cheapest and most straight-forward debt enforcement option, it can sometimes mean having to wait to be paid (such as if a payment plan is agreed), or sometimes seeing only partial payment being made (such as if the sale proceeds of any goods does not cover the full amount of the debt).

It is nevertheless an option worth exploring given it is readily available in most debt situations.

Obtaining an Attachment of Earnings Order

Another option to consider is whether you wish to apply for an Attachment of Earnings Order.

As the name suggests, this is where the Court makes an Order that the debtor must repay the debt to you from their earnings. As such, the Court will typically make an Order, send this to the debtor’s employer, who is then required to deduct a certain amount each month and send this to you. This process then continues until the debt is fully paid.

This option has the added benefit of carrying criminal sanctions if the debtor refuses to engage, meaning debtors cannot simply ignore the matter.

Inevitably, this option is only available if the debtor is actually employed. If the debtor is therefore self-employed or unemployed, then it is unfortunately not available.

Likewise, where the debtor is employed, the Court will consider what the debtor’s typical monthly income and outgoings are when deciding how much should be deducted each month.

If the debtor is employed however, an Attachment of Earnings Order can be an effective tool to have in your arsenal.

Obtaining a Charging Order against the debtor’s property

A Charging Order is essentially where the Court makes an Order securing the unpaid debt against a property which is owned, or co-owned, by the debtor.

This does not mean that the property will then be sold however, as it is usually the case that you will have to wait until the property is being sold at some point in the future, with the debt then being repaid out of the sale proceeds.

Be that as it may, if the debt is particularly large and sizeable in relation to the equity which there is in the property, you may have the option to go one step further and also ask the Court to make an order directing that the property be sold (this is known as an ‘Order for Sale’). Obtaining a Charging Order can therefore be the first step in this process.

As such, whilst a Charging Order may not see you receive any payment immediately, it can be an effective way to safeguard your interest going forwards for when the debtor’s property is eventually sold.

A Third-Party Debt Order

A Third-Party Debt Order is essentially where you know that the debtor themselves is owed money by someone else, i.e. a “Third Party”.

As such, you can apply to Court and ask them to order this “Third Party” to pay you the money which they owe to the debtor, rather than those monies going to the debtor. In short, this Order ‘intercepts’ the payment which would otherwise be paid to the debtor.

Whilst this Order can therefore be used in a wide range of situations, it is common to see people apply for such an Order against the debtor’s bank. This typically means that the debtor’s bank account is frozen, with the bank then having to pay you the value of the debt from the debtor’s bank account.

Although this can therefore be a very effective step to take against a debtor who owes you money, the Court will typically expect you to be able to confirm details of the debtor’s bank account.

Likewise, once the debtor’s bank account is frozen, it is only the funds which are in the account at the time which may be paid to you instead. If there is therefore no money in the account (or not enough to fully repay the debt owed to you), then there is little which can be done about this.

It therefore pays to have a good understanding of the debtor’s banking habits, such as when they get paid, so you can at least try and ‘time’ your Order properly.

Bankruptcy

Making the debtor bankrupt essentially sees someone step in to manage their finances for them, with their assets being used to discharge their debts.

It is, however, an option of last resort, as it is costly and lengthy.

It also means you can make a debtor bankrupt, only to discover that they owe money to many different creditors, with you being at the bottom of the pecking order. This can mean you receive little, if anything, from the bankruptcy process.

Which option is best for me?

As can be seen, there are many options available when you are looking to enforce a debt.

Which option is best for you really depends on the circumstances of your case, as what works for one scenario may not work in another.

It is worth noting however that, save for bankruptcy, many of the above options can be used in conjunction with each other, meaning you do not always have to settle for just one option.

What is clear from the above, however, is that information can be crucial.

For instance, knowing whether a debtor works or not will determine whether you can apply for an Attachment of Earnings Order. Likewise, knowing who they bank with (and when they get paid) will determine whether you wish to explore obtaining a Third-Party Debt Order. Equally, knowing whether they own or rent their property will clearly decide whether or not you can apply for a Charging Order.

Information is essential when it comes to debt enforcement.

If you therefore already have helpful information to hand, then debt enforcement can be relatively straight-forward. If not however, then this is not necessarily the end of the matter, as you can always apply for an Order requiring the debtor to attend Court, and to provide information/documents confirming exactly what assets they own, what debts they already owe, what their monthly pay is, what their partner’s pay is, etc. What’s more, the debtor cannot simply refuse to turn up to Court. If they do, then the Court can find them ‘in contempt’, meaning the debtor can potentially be fined, or even sent to prison. The system is designed to ensure that debtors simply cannot avoid having to engage.

For these reasons, obtaining such an Order can help equip you with the necessary information to then make an informed decision as to which debt enforcement option is best suited to your particular scenario.

How can Pilgrim Hope help?

At Pilgrim Hope, we are very experienced in helping clients enforce unpaid debts.

We can help you make sense of the situation and work through each debt option in a clear, straight-forward manner – ensuring you are fully aware of both the likely costs and timescales involved with each option.

If you are therefore owed money and wish to explore enforcement, contact us to see how we can help.