County Court Judgment (CCJ) Enforcement Options
Have you had a CCJ registered against your Company? If so, how do you protect your company from enforcement of that CCJ?
Firstly, you need to understand how a creditor of your company can enforce a County Court Judgment (CCJ) that they have obtained against your Company BEFORE you can decide how you are going to protect your company from the enforcement process.
it is important to understand that nothing at all automatically happens if someone has obtained a CCJ against your company with the exception of a number of administrative actions:
- The registration of the CCJ on the Court file;
- The registration of the existence of the Judgment is also filed with an organisation called Registry Trust. That Registry will produce lists of CCJ’s to third parties for a fee; and
- The forwarding of the CCJ document to you by the Court to confirm that a judgment has been made against your company.
What next steps must a creditor take to try to collect a sum your company owes them after they have obtained a CCJ?
The creditor has a few options, and each involves them in taking extra steps. This normally involves the completion of another Court Form and a further court fee payment.
Illustrative case study
Let’s say that the name of your company is Stamford Ltd (Stamford) and that your supplier who has obtained the CCJ for £20,000 is called Massey Ltd (Massey). Massey have several options available to them to enforce the CCJ:
- To make a second application to the court for an order that would instruct bailiffs (or sheriffs) to take seizure action against assets owned by Stamford. This could include the seizure of vehicles, machinery, computer equipment etc. This seizure action and the court order is called a warrant of execution;
- To issue a court document against Stamford’s bankers which instructs the bank (as long as the account is in credit) to pay, under order of the court, the £20,000 to Massey without reference to you. This is called a garnishee order or third-party debt order.
Alternatively, a Garnishee Order (Third Party Debt Order) can be issued, through the court, by Massey against one of Stamford customers. For example, if a totally innocent customer of Stamford owed £15,000 to Stamford then Massey’s garnishee court order could be sent to Stamford’s customer who would have to pay £15,000 directly to Massey;
- Massey could also serve a statutory demand against Stamford as a precursor to taking winding up proceedings against Stamford;
- Massey could consider issuing through the Court an application for a charge (a charging order) against any property owned by Stamford. The effect of a charging order if granted is that Massey would effectively hold a legal mortgage over one of Stamford properties and could then seek possession and sale of the property; and
- Massey could seek to obtain an order of the court to have Stamford’s directors personally examined in court, known as an oral examination. The purpose is to establish what assets are owned by Stamford. Armed with this information, Massey can make an informed decision about which one of the above enforcement action options is more likely to be successful.
If a CCJ has been ordered by the Court against your Limited Company which your company is unable to pay then it is important that you take professional advice quickly.
If you would like a FREE CONSULTATION* with an Umbrella.UK licensed insolvency practitioner to discuss your company’s situation, or assist in completely restructuring your company’s financial affairs, please call 0800 611 8888
*We don’t charge for an initial consultation, but it may lead to an insolvency solution where our pre-appointment costs are reimbursed as part of the fee structure that creditors approve.