Debt Collection

There are essentially four main stages in debt collection. 

1. Send a letter before action 

2. If payment is not forthcoming, you can continue by issuing legal proceedings 

3. Obtaining a county court judgment 

4. And commencing enforcement action. 

 

Letter before action: This is a formal letter which sets out to your debtor what is owed and what the consequences will be if the debt is not discharged before a specified deadline. 

 

Issue: If the letter before action does not have the desired effect we may issue proceedings. If an acknowledgement of service is filed indicating that the debtor intends to defend part or all of the claim, then the debtor has a further 14 days from the date of service of the Claim Form to file a defence. 

 

Judgment: Judgment can be entered 14 days after service of the Claim Form and Particulars of Claim if the debtor has not filed an Acknowledgment of Service or 28 days after service if an Acknowledgment of Service has been filed but a Defence wasn't. 

 

Once judgment has been entered this will adversely affect the debtors ability to obtain credit. 

 

The Judgment will remain on the debtors credit file for 6 years unless it is satisfied within one month of it being entered. 

 

Enforcement: If the Judgment remains unpaid there are a variety of enforcement methods available to the creditor. 

 

1. Warrants/Writs of Control: If your Judgment is less than £600.00 or your claim is subject to the Consumer Credit Act a Warrant of Control is issued and a County Court Bailiff is instructed. The Bailiff attends at a debtor’s premises or residence and seizes goods to be sold at public auction to discharge the Judgment debt and costs. Only goods belonging to the debtor and that are free of finance can be seized. 

 

2. Charging Order: If the debtor owns a property you can enforce the Judgment by obtaining a Charging Order. This will secure your debt against the debtor’s property. 

 

Before a Charging Order is applied for, we would always check to see what, if any, other charges are already registered against the property and then advise whether we believe it is worthwhile obtaining a Charging Order. 

 

Once a Final Charging Order is obtained you can apply for an Order forcing the sale of the property. 

 

The Final Charging Order will remain registered against the property until the debt is discharged for example when the property is sold or remortgaged and there is sufficient equity in the property. 

 

3. Attachment of Earnings: If the debtor is employed then you can apply to the Court for an Attachment of Earnings Order. An Attachment of Earnings orders the debtor’s employer to deduct an amount from the debtor’s wages/salary, which is then sent to the creditor via the Centralised Attachments of Earnings Payment System (CAPS) until the Judgment debt is discharged. 

 

4. Third Party Debt Order: If you are aware that your debtor is owed money by a third party, i.e. the debtor’s bank or building society account or a customer of the debtor then we can apply to the Court for an order that those monies are paid direct to you. 

 

5. Bankruptcy: If the debtor is an individual and you have an unsatisfied Judgment then you may present a Bankruptcy Petition against the debtor. This is presented to the local Court of the debtor. Various searches have to now be carried out at both the debtor’s local Court and the Royal Courts of Justice before a Petition can be presented to ensure that there are no prior Petitions pending. 

 

This sets out what debt is due and informs the debtor that your intention is to begin Bankruptcy proceedings if the debt is not satisfied within 21 days of service of the Statutory Demand. 

 

6. Winding Up: If the debtor is a limited company or partnership then you may present a Winding up Petition against the debtor. It is not necessary to obtain an unsatisfied Judgment or to serve a Statutory Demand before presenting a Winding up Petition however it is always good practice to give notice to the debtor of your intentions and can often result in payment being made before substantial fees are incurred. 

 

If you have a debt that you are struggling to recover please call the Avery Walters Debt Team on 0113 200 7480 or learn more about our debt recovery service.