IN the current economic climate many companies and individuals are turning to the court process to recover outstanding debts.

However, once a judgement has been awarded some may be unsure as to the options available to enforce their judgement.

There are different methods of enforcement: Charging Order: If the person owing money has assets it is possible to apply to the court for a charging order to be placed on their property for the value of the judgement.

If there is sufficient equity in the property the amount of the judgement can be recovered from the proceeds of sale. This is a two stage process and at the final stage the court will decide whether to issue a final charging order, which makes it possible to apply to the court for an order for sale and recover the debt.

Instructing bailiffs: A county court judgement for £5,000 or less allows you to apply to the court for a warrant of execution.

A county court bailiff is then granted the power to seize goods belonging to the debtor up to the value of the judgement. If the judgement is more than £5,000 it must be enforced in the high court, which will order a high court enforcement officer to seize the appropriate goods.

Bankruptcy: If the judgement exceeds £750 an application to petition for an individual debtor’s bankruptcy may be made.

This can be an expensive option and should be considered carefully. If the debtor has few assets and a number of creditors you may suffer the expense of filing the petition and fail to recover the full judgement amount. Generally, a statutory demand should be served on the debtor specifying the amount owed. Twenty one days must then be allowed to pass before filing for a bankruptcy petition. If the debtor is a company, a winding up petition may be made.

Again, the expense involved in this method should be carefully considered.

Third party debt order: If a third party owes money to the debtor an application can be made to the court for an order requiring the third party to pay their debt to you. This type of order is most commonly made against a bank that owes the debtor money.

Attachment of earnings: If the debtor is employed you can apply to the court for an order requiring their employer to make regular deductions from their earnings and pay these into the court. If the debtor is either self-employed or unemployed this option is not available.

To avoid having to use these processes, it is often easier from the outset of the dispute to consider the financial position of the person or company being sued – do not suffer the expense of chasing people with no money.

■ Clare Dixon is a member of the business and company law at BHP Law. She can be contacted on 01642-672770.