Judgement Received - Enforcement Options?

[apollo18]

Hello, I am looking for some advice if someone could please help.
I have received a default judgement in my favour against my tenants (a married couple) who stopped paying rent last year and then abandoned the property despite the fixed term still having months to run.

What happens now?

They are both self-employed so I assume an attachment of earnings is not possible.

I know one of them owns at least two properties that are rented out so maybe my best option is a charging order against the properties (am I only able to make a charging order against one of the properties?). This could mean that I would not receive the money owed until they sell the property though. Would I be able to force the sale of their property? It is a lot of money (£10k) and it could be many, many years before they decide to sell (or they could choose not to sell and leave it to their children, for example).

Would it be possible to make a third party debt order against the tenants of their properties? I suppose that would not be possible without having the tenants' names (although I do have the addresses)?

I understand that forcing bankruptcy on someone is very difficult and expensive but I have read that starting the first step of the proceedings can often scare people into paying their debts. Any thoughts on this?

Is it worth bothering with an information order since from what I understand defendants usually lie and do not declare their true assets.

Thanks in advance for any help you can give me with this.

[jaguarsuk]

You are correct that as they are self employed you are not able to attach their earnings.

Firstly I would write to them with a copy of the judgement order asking them to make payment, if a payment term is stated on the order by that date and if there isn't one stated within 28 days of the date of the judgement.

In the letter state two things. First that should they fail to settle the amount owing it is your intention to consider all appropriate enforcement methods which may include escalation of the matter to the High Court for enforcement via a Writ of Control and you would in that instance instruct High Court Enforcement agents to execute that writ upon them. This should hopefully scare them into paying up.

Second that if they fail to settle then it will result in a CCJ being registered on their credit files and this will have a negative impact on their ability to obtain credit for a period of six years.

Doing this will allow you to demonstrate to the court should you need to enforce that you have taken reasonable steps to recover the sum, the consequences have been demonstrated to them and that this is being sought as a last resort.

You could escalate it to the High Court at a cost of £60 and then HCEO's will attend their property to demand repayment, but if their cars are on finance and there is little goods of value then it might not be successful. If unsuccessful the HCEO's levy a charge of £75 on you.

You could get a charging order at a cost of £100 and then further apply at a cost of £255 to the court to force sale of the property to settle your debt, whether that would settle the whole amount depends on the value of the properties as they probably have them on buy to let mortgages. Would 20% of the value of the properties settle your £10K?

I think you might be a little confused as to what a 3rd party debt order is as you can't apply for one against their tenants. A third party debt order allows you to take the money the owed directly from their bank accounts if they are holding back money so as not to pay you or if you know they have money going in. Essentially you would be freezing their assets.

I think in deciding should they ignore your letter on the best option will be down to what you know about them and what you are willing to spend to enforce as that outlay is not recovered until they actually settle the judgement.

[apollo18]

Thank you very much for your detailed reply and for letting me the correct meaning of a third party debt order is.

i do not believe their possessions at home would amount to much. They do drive a Porsche Cayenne but a 2007 model and I’m not sure if that would fetch much at auction, but hopefully a couple of thousand.

i think the safest option would be a charging order as the threat of being forced to sell it may encourage them to pay up and if not then I’m sure there would be enough equity in the property to pay the debt.

I know they own at least two properties (and I have the addresses). Would I put a charging order on both properties or just one?

[jaguarsuk]

They do drive a Porsche Cayenne but a 2007 model and I’m not sure if that would fetch much at auction, but hopefully a couple of thousand.

i think the safest option would be a charging order as the threat of being forced to sell it may encourage them to pay up and if not then I’m sure there would be enough equity in the property to pay the debt.

I know they own at least two properties (and I have the addresses). Would I put a charging order on both properties or just one?

The Porsche is probably on Finance, so couldn't be seized anyway.

I would put a charge on both... the more security the better.

I would still advise writing first with the scary High Court Enforcement threat even though that's not you real intended route of enforcement combined with how it'll ruin their credit rating too. Just see if it makes them pay up as it saves you cost, time and effort at court.

If you get a charging order you'll still ruin their credit by the way as the CCJ once enforced regardless of method is sent to Trust Online to be reported to credit reference agencies.

[apollo18]

Thanks again Jaguarsuk for your reply.

I am a bit sceptical of sending them the scary letter as I don't think it will have much effect on them. Also I know they had a least one of their properties up for sale a few months back and had received offers on it (offers which at that point they had rejected). I've no idea whether they have since accepted an offer but it is certainly a possibility but of course I would like to get a charge on the property before they complete on a sale and possibly disappear with the proceeds back to their country of origin.

Then again, it could be worth a try sending the letter as it could have the desired effect and as you say, even if it doesn't have the desired effect, it would help convince a court

that I have taken reasonable steps to recover the sum owing.

[jaguarsuk]

Thanks again Jaguarsuk for your reply.

I am a bit sceptical of sending them the scary letter as I don't think it will have much effect on them. Also I know they had a least one of their properties up for sale a few months back and had received offers on it (offers which at that point they had rejected). I've no idea whether they have since accepted an offer but it is certainly a possibility but of course I would like to get a charge on the property before they complete on a sale and possibly disappear with the proceeds back to their country of origin.

Then again, it could be worth a try sending the letter as it could have the desired effect and as you say, even if it doesn't have the desired effect, it would help convince a court

that I have taken reasonable steps to recover the sum owing.

You have to show the court you have given them opportunity to make payment and as you say by writing to them you can evidence that. They could attend a hearing for the charging order and claim you have not provided them a method of payment, therefore that's the reason they haven't paid and delay you getting one until after the sale completes.

By writing to them giving them 14 days to pay threatening HCEO it won't even enter their heads you might apply for a charging order. Have your paper work for the application ready for day 15 to file it with the court, so if they don't respond you can move straight away. Here's the form: https://assets.publishing.service.go...5/n379-eng.pdf

[apollo18]

I wrote to the defendants giving them 14 days to make payment or threatening HCEO and that deadline ended today. This morning I called MCOL to ask some information and they told me they received a letter from the defendants yesterday offering to pay by installments and they told me I will be receiving a letter with further details. The offer is £500 per month so it will take around 2 years to pay off.

Does interest still accrue on the outstanding debt during these 2 years while they are paying in installments?

I told the lady I was speaking to at MCOL of my intention to apply for a charging order and she told me I could still do so but I later logged into my MCOL account and as well as showing the offer to pay by installments it also shows that a bar has been put in place for the defendants. I called MCOL back to ask what this means and it was explained that this prevents any enforcement action taking place until the offer of installments is dealt with (whether I accept or decline the offer) and that I am unable to apply for a charging order at the moment.

[jaguarsuk]

I wrote to the defendants giving them 14 days to make payment or threatening HCEO and that deadline ended today. This morning I called MCOL to ask some information and they told me they received a letter from the defendants yesterday offering to pay by installments and they told me I will be receiving a letter with further details. The offer is £500 per month so it will take around 2 years to pay off.

Does interest still accrue on the outstanding debt during these 2 years while they are paying in installments?

I told the lady I was speaking to at MCOL of my intention to apply for a charging order and she told me I could still do so but I later logged into my MCOL account and as well as showing the offer to pay by installments it also shows that a bar has been put in place for the defendants. I called MCOL back to ask what this means and it was explained that this prevents any enforcement action taking place until the offer of installments is dealt with (whether I accept or decline the offer) and that I am unable to apply for a charging order at the moment.

It wouldn't accrue interest unless the original order had stated interested accrual until settlement of the judgement. Next you should receive the offer and options you have from the court.

I know it's along time (I'm half way through a defendant paying me for 2 years), but sometimes it's better to take the approach that accepting the length of time will mean you actually get paid as opposed to trying to fight on for more and then ending up with the same instalments anyway.

A charging order wouldn't necessarily mean you'd get paid until the house is sold. If it is jointly owned you can't force sale of it and so it could be decades before you see your money.

Obviously this is your claim and you should proceed as is best for you.

[apollo18]

I have received a copy of the N245 form the tenants sent to the court and it details what they say is their income and outgoings.

There are a few lies contained within it:

(1) they both claim to be employees of a limited company although they are both listed as directors of the company with Companies House.

(2) they give their current joint monthly income as £1600 but the husband claimed 2 years ago to be earning a salary of £95,000 as an employee of this same company which passed the tenant reference check (and involved the "HR manager" of the company confirming his salary).

(3) they claim 'TV rental and licence' to be £29 per month giving a total annual amount of £348 although a TV licence costs £150.50 per year and I am sure they do not rent a TV (although I concede that I do not have proof of that).

(4) they claim to be paying £1650 per month rent although I know this is far too high for the flat they are renting (other 2-bed flats in the same building have asking prices of no more than £1200).

(5) the rental income they claim to be receiving from their own properties is £1800. I know they own at least two properties and I know that one of their properties in particular would rent for a minimum of £2000 per month (I am not so familiar with the building their other flat is in but a Rightmove search shows they achieve rents of around £1500 per month).

They also appear to have exaggerated their utility bills, etc.

Do you think it is worth me writing to the court pointing out the above falsehoods (especially the first two points) and the fact they have lied to the court? I can provide the evidence from Companies House of my claims to points 1 and 2.

The options given to me regarding the installment payments is to either accept or decline (and give an installment amount I would accept, if declining the offer). I would like the defendants to provide proof of their income and outgoings but it seems the court does not bother themselves with that, thus leaving the system open to abuse.

If I decline the offer then the court would decide a monthly amount they deem the defendants could afford and it could be a lesser amount than the defendants have offered. It seems the court accepts the figures given by the defendants at face value. The figures they have given leave them with £543 per month out of which they are offering to pay me £500 per month.

[jaguarsuk]

I have received a copy of the N245 form the tenants sent to the court and it details what they say is their income and outgoings.

There are a few lies contained within it:

(1) they both claim to be employees of a limited company although they are both listed as directors of the company with Companies House.

(2) they give their current joint monthly income as £1600 but the husband claimed 2 years ago to be earning a salary of £95,000 as an employee of this same company which passed the tenant reference check (and involved the "HR manager" of the company confirming his salary).

(3) they claim 'TV rental and licence' to be £29 per month giving a total annual amount of £348 although a TV licence costs £150.50 per year and I am sure they do not rent a TV (although I concede that I do not have proof of that).

(4) they claim to be paying £1650 per month rent although I know this is far too high for the flat they are renting (other 2-bed flats in the same building have asking prices of no more than £1200).

(5) the rental income they claim to be receiving from their own properties is £1800. I know they own at least two properties and I know that one of their properties in particular would rent for a minimum of £2000 per month (I am not so familiar with the building their other flat is in but a Rightmove search shows they achieve rents of around £1500 per month).

They also appear to have exaggerated their utility bills, etc.

Do you think it is worth me writing to the court pointing out the above falsehoods (especially the first two points) and the fact they have lied to the court? I can provide the evidence from Companies House of my claims to points 1 and 2.

The options given to me regarding the installment payments is to either accept or decline (and give an installment amount I would accept, if declining the offer). I would like the defendants to provide proof of their income and outgoings but it seems the court does not bother themselves with that, thus leaving the system open to abuse.

If I decline the offer then the court would decide a monthly amount they deem the defendants could afford and it could be a lesser amount than the defendants have offered. It seems the court accepts the figures given by the defendants at face value. The figures they have given leave them with £543 per month out of which they are offering to pay me £500 per month.

You need to decline the offer and file an N316 application to force them to attend the court and substantiate their I&E. The cost of the application is £50 and this should be added by the judge to the judgement when they vary the order once the true I&E is found out.

In box 5 of the application you need to challenge points 3-5 as there is potentially a lot more money they could be paying towards the judgement and you want the court to substantiate their claims by asking for evidence of the TV rental or to adjust that figure to the true cost of a TV License, their tenancy agreement showing their rent and the tenancy agreements they have with their tenants on their flats showing those rents.

[apollo18]

You need to decline the offer and file an N316 application to force them to attend the court and substantiate their I&E. The cost of the application is £50 and this should be added by the judge to the judgement when they vary the order once the true I&E is found out.

Is it best to send the n316 along with my response declining the offer, or should I send them separately?

In my response declining the offer I am supposed to give an amount per week/month I would accept in intallments. Should I put an amount I think is fair or should I leave this blank until the tenant has been called for questioning?

After the offer is declined I understand the court then looks at the figures and decides an installment amount - would they still do this if they realise I have asked for the defendants to attend court for questioning via the n316? I imagine if they do this then it would be done before a date is set to question the defendants.

[jaguarsuk]

Is it best to send the n316 along with my response declining the offer, or should I send them separately?

Yes, send it with as it is then clear to the court why you have declined.

In my response declining the offer I am supposed to give an amount per week/month I would accept in intallments. Should I put an amount I think is fair or should I leave this blank until the tenant has been called for questioning?

Put an amount you think is fair. If that is truly unaffordable to them it will become apparent in questioning with a lower affordable rate set.

After the offer is declined I understand the court then looks at the figures and decides an installment amount - would they still do this if they realise I have asked for the defendants to attend court for questioning via the n316? I imagine if they do this then it would be done before a date is set to question the defendants.

State the reason you are declining combined with the n316 will mean they should delay setting an amount until the debtor has been sufficiently questioned.

I would serve a copy of the n316 on the defendants with a cover letter along the lines of:

Dear X & Y

RE: <<YOU> -v- <<1st DEF>> and <<2nd DEF>> Claim No: XXXXXXXX

I write further to the offer you made to the court in the above matter to settle the judgement by instalment.

It is my belief that the Income and Expenditure form you submitted to the court is not a true reflection of your financial position and as such I have filed an Application for order that debtor attend court for questioning to allow the court to establish the validity of the figures contained within it. Enclosed by way of service upon you is a copy of the form N316, I confirm this has been filed with the court.

Should it be the case you would prefer not to have to attend court to evidence your financial position you may settle the full amount of the judgement by payment of the outstanding amount in full to:

Name: <<YOU>>
Account: <<YOUR ACCOUNT>>
Sort Code:<<YOUR SC>>
Reference: <<CLAIM NUMBER>>

On settlement of the judgement I would advise the court and at that stage it would represent closure of the matter.

Yours sincerely



<<YOU>>
ENC.

[ostell]

If they are employees of the company that they are officers of then see what financial details you can download from the companies house web site. This would give a better figure of the funds they have available. I found this helping sister in law with divorce. Husband was claiming minimum income from company but receiving the balance as dividends.

[apollo18]

If they are employees of the company that they are officers of then see what financial details you can download from the companies house web site. This would give a better figure of the funds they have available. I found this helping sister in law with divorce. Husband was claiming minimum income from company but receiving the balance as dividends.

Thanks for the tip. The Companies House website shows that the company was set up in Nov 2015 and that dormant accounts were filed in Sep 2017 but unfortunately that was the only financial information I could find.

[apollo18]

Am I as the creditor able to attend the questioning of the debtors and will I be able to respond and refute any lies they tell?

If I am not allowed to attend then what happens after the questioning has taken place?
Do I get sent a record of their answers to the questions?