Following on from Enforcing Judgements: 1/2, in part two, we will be looking at:
- Third Party Debt Orders;
- Orders for Committal; and
- as enforcement options when facing a situation whereby you have acquired a judgement but your opponent is not complying with the order of the Court.
Third Party Debt Orders
This is an order from a Court ordering that a debt owed to the judgement debtor is instead reassigned to the judgement creditor. Although potentially an effective way of enforcing a money judgement they are in practice relatively rare.
This is because it is very difficult to obtain information about debts owed to the judgement debtor unless the judgement creditor has first gone through the process of bringing the judgement debtor to Court for questioning about their financial circumstances.
Naturally this is an enforcement method that is only appropriate for enforcing money judgements.
Order for Committal
A judgement is an order of the Court and the failure of a judgement debtor to follow its terms amounts to a criminal offence known as Contempt of Court. Consequently, it is possible to ask a Court to order that a defaulting judgement debtor is sent to prison. This is known as Committal.
In practice an application for Committal is made in two stages; on the initial application the Court will make what is known as unless order, giving the judgement debtor a further period of time in which to comply with the original order. However the second order will include what is known as appeal notice mandating that the judgement debtor will be committed to prison should they not comply with the terms of the new order.
Orders for Committal are possible if you are enforcing any type of judgement, but are most effectively used in the enforcement of non-money judgements, for example injunctions. They are however difficult to obtain as naturally the Court is generally reluctant to commit individuals to prison and will generally give them multiple opportunities to mend their ways.
This is a tried and trusted way of enforcing a money judgement. It concerns the application for the bankruptcy (if they are an individual judgement debtor) or winding up (if they are a company) of a judgement debtor. It is possible to apply for the insolvency of the judgement debtor after a statutory demand has been served upon them and if they have not paid.
This is potentially a very effective method of enforcing the judgement as the judgement creditor will be listed as a creditor in the bankruptcy or liquidation of the judgement debtor. This does however also reveal the weakness of this method of enforcement, as if the judgement debtor has multiple other creditors, then the judgement creditor may find themselves waiting at the end of a very long line.
In the worst case scenarios they may not receive anything out of the bankruptcy or liquidation at all. It would be wise to obtain information on the judgement debtor’s financial circumstances and any other debts they may own before embarking down the route of insolvency.