You will get a CCJ if you owe the money....
You will get a CCJ if the court decides you owe the money, or if you fail to respond to the summons and the claimant applies for and obtains a default judgment against you.
The payment terms of that CCJ will depend on your income and expenditure.
Correct.
Also worth bearing in mind, you cannot be imprisoned for non payment of a county court judgment debt, even if a court has ordered you to pay a certain amount each week / month, or forthwith.
On the subject of selling debts, if this is done prior to a court judgment being obtained, the purchaser of the debt is taking a gamble that the money is actually recoverable. I'm sure most people are familiar with the phrase, 'you can't get blood out of a stone'. One of the difficulties of buying debt and attempting to obtain payment through the court is that it can be difficult to prove the money is actually due, unless the person or company who sold it provided, or is able to provide adequate evidence to enable a judgment to be obtained. Finance company (consumer credit act) debts which have been sold on can be difficult to progress because of the lack of evidence that the debt existed.
There are plenty of people who literally don't care if you obtain a ccj against them, and many of them arrange their lives and their finances so that's virtually impossible to take money off them.
Enforcement
Civil debt is not a criminal offence in this country, and you cannot usually be imprisoned for not paying a county court judgment, however there are limited occasions when it is possible to end up in a cell, unless you know the pitfalls.
A Claimant can spend a significant amount of money pursuing the original debt, with no guarantee of actually getting paid. The same could be said of getting debt collectors involved.
Here is a list of the various methods of enforcement available to Judgment Creditors (ie successful claimants) in the County and High Courts.
Order to obtain information from a judgment debtor
A Claimant can find out information about the financial circumstances of the judgment debtor. The court will order the debtor to come to court so they can give details regarding their finances. They might be asked about any paid employment, assets, property etc, bank accounts (account numbers, addresses etc). The court cant do very much if a debtor doesnt turn up for this.
If a debtor fails to appear, the Claimant can pay a fee for bailiff service of a summons ordering the debtor to attend. This is because the summons will have a penal notice attached, which means if the debtor fails to appear again, they can be committed to prison for contempt of court, so obviously the court needs to be satisfied that the debtor is aware of the need for their attendance, and of what will happen if they dont attend. Once a debtor has been served with the summons, the bailiff will swear an affidavit of service and file this with the court. Regardless of whether the judgment debtor goes to the first or second appointment, the Claimant, or their representative, is only asking questions because they dont already know the answers or have sufficient details about the debtor's finances to decide how to obtain payment from them. I have known cases where judgment debtors have made perfectly legal changes to their situations in order to put themselves into a position where the Claimant was unable to obtain money from them.
Warrant of Execution
The bailiff visits the home of the judgment debtor and seizes goods to the value of. Thats the theory. In practice the goods actually have to belong to the judgment debtor, and in many cases, for example if the judgment debtor was just a lodger, almost all of the items in the property belonged to the landlord anyway. Even if a judgment debtor did have possessions in their home, bailiffs sometimes report back to the court that there were insufficient goods to cover the cost of removal and sale and the Claimant is back to square one, minus another court fee.
Attachment of Earnings Order
The judgment debtors employer (assuming the debtor is employed, and tells the Claimant who their employer is) is ordered to pay an amount directly to the Claimant, subject to a protected earnings limit. The suitability of this one depends on the circumstances of the judgment debtor. Ive known cases where people who knew what was coming simply gave up or changed their job to avoid having their wages docked by an attachment of earnings order. In the case of temporary employment or a fixed term contract, and bearing in mind how slowly the county court system sometimes works, it is occasionally the case that by the time an attachment of earnings order is processed and sent to an employer, the contract is over, the employee has been paid, has moved on, and its too late. If this happens, the Claimant is likely to have wasted another court fee.
Charging Order
This means that the value of the judgment debt is made subject to a legal charge (similar to a mortgage) against the judgment debtors equity in a property (if they have any). The Claimant gets paid out of the proceeds of eventual sale. This only works if the judgment debtor actually has a registered legal interest in the property. When a charging order is contemplated by a Claimant, their solicitor would normally do a Land Registry search to confirm ownership details in advance of making an application to the court. I remember a case where a judgment debtor guessed that the Claimants next move would probably be an application for a Charging Order. In fact, a land registry search had already confirmed the judgment debtors property was in joint names. But by the time the application to the court was made, it was already too late, because the judgment debtor had transferred the property into his wife's sole name, so the charging order couldnt go ahead.
Third Party Debt Order
The debtors bank is ordered to pay the Claimant out of the debtors bank account. This only works if there are sufficient funds in the account.
According to the Civil Procedure Rules, bank or building society includes any person carrying on a business in the course of which he lawfully accepts deposits in the United Kingdom, however this conflicts with what District Judges have sometimes suggested, when they have said a bank has to have its registered office in England or Wales. Obviously this would be complicated if a debtor has offshore accounts, or an account with RBS, whose registered office is in Scotland. It might be in the UK, but its not technically in England or Wales. Judges sometimes pick up on this and refuse applications for TPDOs. RBS does have an office in London and the last time I asked, they said they process hundreds of orders per year, and have an address in London for use with such applications.
When an application is made for a Third Party Debt Order, the court will first order the debtors bank to freeze the relevant account to prevent the debtor from removing funds to defeat the purpose of the order. The debtor is only notified about this once the account has been frozen. Obviously, this only works if there is enough money in the account to satisfy the judgment debt, at the time the account is frozen.
