How the court can make you pay your debts
If you've been issued with a CCJ, here are five further ways the court may enforce your debts.
As discussed in our last blog post, charging orders are one possible consequence of being issued with a county court judgement (CCJ). However, other methods can also be used by the courts to enforce your debts.
Attachment of earnings order (AOE)
Your creditor may ask the court for an AOE, which allows them to take repayment instalments directly from your wages.
You should receive an N56 ‘Form for replying to an attachment of earnings application’ from the court, which must be completed and returned within eight days along with a copy of your most recent wage slip. Failure to reply can lead to a court summons.
You can offer monthly repayments using this form and ask for the AOE to be suspended. If your offer is accepted, you avoid an AOE, provided you keep making regular payments. Your employer will not be informed.
If an AOE is granted, your employer is contacted to arrange for payment to be taken from your wages, along with a one pound administration fee each time. Pension and benefit income is not affected.
If you can’t pay court fines, a magistrates’ court can also issue an AOE; orders issued by a magistrate do allow for payments to be taken from pension or benefit income.
You can’t receive an AOE if you are self employed in a partnership or as a sole trader, although an order can be made against wages you are paid from a limited company you own.
If you change jobs while you have an AOE, you must contact the court with details of your new employer. If the order will cause problems with a new employer, you can apply to the court to suspend it using an N244 form, available from HM Court Service. This involves a fee.
Third party debt order
This allows the court to take money directly from your bank account to pay your debts. This is not a common course of action.
Examination of means
The court can ask you to attend a hearing, to officially give evidence about your financial situation. This is also not commonly used.
Warrant of execution
A warrant of execution allows bailiffs to visit your home, to begin the process of valuing and seizing assets you may own to cover your debts.
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High court enforcement
In rare cases, creditors may seek enforcement of a CCJ in the high court, giving them further advantages.
This includes the addition of an eight percent statutory interest rate to all debts dealt with there. However, debts regulated by the Consumer Credit Act are never enforced in the high court, or those worth under £600.
The court may decide you should pay instalments towards your debts. If you think they are unaffordable, you can apply to the court to reduce them.
The other big benefit for creditors of high court enforcement is the possible subsequent involvement of private bailiffs or high court enforcement officers, which are considered by many creditors to be more effective than county court bailiffs.
The next edition of this blog will detail your rights when bailiffs are involved, but you can contact CCCS for advice on your options if you are subject to court enforcement action or have been threatened with bailiffs.
The charity’s freephone helpline (0800 138 1111) is available Monday to Friday, from 8am to 8pm. CCCS’s online counselling tool, CCCS Debt Remedy, can be accessed 24 hours a day.
You could also contact Community Legal Advice, a free and confidential advice service paid for by legal aid.