In our article 'Enforcement of Charging Orders by Sale' we discussed how a Charging Order is one potential method of enforcement of a Judgment debt or Liability Order. However, this only serves to secure a debt. To achieve a recovery ‘Order for Sale’ may be required. In this article the process of achieving an Order for Sale.
An Order for Sale is, by no means, an easy outcome to achieve. Nor is it one which many creditors may actually wish to take through to its ultimate conclusion (or bear the cost of doing so in the meantime). References to this being “a draconian step to satisfy a simple debt” then, as found in the White Book, are unhelpful. The aim of a creditor is, after all, to achieve recovery of a sum of money that is owing to them, not to inflict punishment on a debtor.
In terms of process:
- The Claimant must gather and present written evidence to the Court in support of their Claim – this includes obtaining information including the value of the property, the amount of security held by creditors with prior charges, identifying who is in possession of the property and detailing any potential matrimonial issues.
Getting this process right at the outset is vital to establishing the viability of making it in the first place and is essential to the prospects of success for the Claim. After all, no creditor wants to ‘throw good money after bad’.
- Judicial discretion at Hearing then plays a large part in providing protection for debtors, although this can often be overstated. Experience shows that there is generally regard for the need to balance a debtor’s interest against the competing need of their creditor to be paid their debt.
The outcome at Hearing can vary and, in certain circumstances, it may be advantageous to all parties concerned to seek a suspended Order for Sale on terms of substantial repayment; but
- If an Order for Sale is granted, a creditor can expect to then have to take the steps necessary to enforce the Order: taking possession, securing and insuring the property, marketing, achieving a sale, dealing with the conveyance and distributing funds.
The Recoveries Department at DWF has vast experience in advising on and managing the Order for Sale process from pre-action to sale, with the objective of achieving a recovery. Our statistics show that it is an extremely effective method of obtaining debtor’s active engagement and consequently, only a minority of matters ever proceed to taking possession and fewer still to sale.
The ‘secure first’ philosophy has become the de facto response where a debtor has property as an asset. However, an Order for Sale is not then always viable.
It should be noted that the Civil Procedure Rules permit a Judgment creditor to use more than one method of enforcement, either at the same time or one after another. Other options also remain open to cash-strapped Local Authorities, under the Council Tax Regulations. For all types of creditor, the focus must be to obtain quicker repayment of a Judgment debt.
Recent strategies that we have employed to successfully recover monies for our clients include:
- Issuing Writ of Control on a portfolio of Charging Orders to enforce against personal property which resulted in a significant increase in repayments for our Client.
- Securing by way of Charging Order, whilst also seeking a Third Party Debt Order to secure the funds held by a Judgment debtor in their bank account. This resulted in a significant lump sum payment being made, with the balance remaining secured.
We have a number of tools to help provide strategic enforcement advice to Clients on a daily basis, even before any action is taken and all with the aim of preventing our Clients from ‘throwing good money after bad’
If you would like more information, or would like to discuss how we can assist with the process of achieving an Order for Sale, please contact one of our specialists below.This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.