IN the current economic climate, many are turning to courts to recover outstanding debts. However, once a judgment has been awarded, some may be unsure about the options available to enforce their judgement.

There are varied 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 charging order, which makes it possible to apply 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 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 pass before filing for a bankruptcy petition. If the debtor is a company, a winding-up petition may be made. The expense involved in this should be considered carefully.

● 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.

This order is most commonly made against a bank that owes the debtor.

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

In order to avoid having to use these processes, it is often easier 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 team at BHP Law.

She can be contacted on 01642-672770.