What do you do if you are owed a significant sum by a customer who seems unwilling or claims to be unable to pay?
There are a number of enforcement routes which can help you to recover a debt for example:
- Try to Speak to The Debtor in Person
- Send Written Reminders
- Find a Debt Mediation Service
- Write a Letter Before Action (LBA) Final Warning
- County Court Proceedings
However, one option which can take debtors by surprise is a Garnishee Order, also known as a Third Party Debt Order.
A Third Party Debt Order is a way of enforcing a County Court Judgment (CCJ) against an individual or a company and is usually made to stop a debtor from removing funds.
It is usually made against a bank (although can be another institution, an employer or an individual) and the person or organisation that is holding the money is referred to as the ‘third party’.
The person or company which who owes you the money is known as the ‘judgment debtor’, while you are referred to as the ‘judgment creditor’.
You can make an application for an order at any time after you have obtained a CCJ.
The basic procedure for using the Third Party Debt Order or Garnishee Order process is as follows:
- Obtain a County Court Judgment (CCJ).
- Complete court form N349, and send the application to the court with the necessary fee.
- The court will issue an Interim Order with a hearing date.
- Serve the Order on the third party, and then file a certificate of service with the court.
- The third party will disclose the amount frozen (if the third party is a bank, they will also disclose any other bank accounts the debtor may have); you will then need to send this correspondence to the court.
- Attend the hearing listed at court.
- Obtain the Final Order, and either you or the court serve the Final Order on the third party, then wait to receive the funds.
As always, it’s important to seek out a local legal or financial expert for advice before beginning the legal process to recover debt.
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