Enforcing a CCJ against a Limited Company
Enforcing a County Court Judgment (CCJ) Against a Limited Company
Enforcing a CCJ against a Limited company is a problem many will face. A County Court Judgment (CCJ) is a legal tool that businesses and individuals can use to recover unpaid debts. When a limited company fails to pay its debts, creditors have the right to apply for a CCJ against it. If the limited company does not comply with the CCJ’s terms, enforcement action may be taken. This article provides an in-depth look at how to enforce a CCJ against a limited company.
What is a County Court Judgment?
A County Court Judgment, or CCJ, is a type of court order in England, Wales, and Northern Ireland that might be registered against a company if they fail to repay money they owe. A creditor can apply for a CCJ if they believe there’s no prospect of being paid.
Obtaining a CCJ Against a Limited Company
Before applying for a CCJ, the creditor must send a ‘letter before claim’ to the debtor. The letter should detail what is owed, why the debtor should pay the debt, and the deadline for payment, usually 14 days. This can be a technical process and needs to be conducted in accordance with pre action protocols.
If the debtor does not pay within the stated period, the creditor can proceed to court. They must fill out a claim form detailing the debt, which is then sent to the debtor. If the debtor either disputes the claim and loses or does not respond, the court may issue a CCJ.
Enforcing a CCJ against a Limited Company
If a limited company does not adhere to a CCJ, the creditor can take steps to enforce the judgment. Here are some of the most common methods used:
1. Warrant or Writ of Control: This authorizes Court bailiffs or High Court Enforcement Officers to visit the company’s premises and seize goods to the value of the debt plus any additional costs.
2. Third Party Debt Order: This order freezes money held by third parties, such as the company’s bank, until the court decides whether or not the money should be used to pay the debt.
3. Charging Order: This secures the debt against a property or securities owned by the company. If the debt is still not paid, the creditor can apply for an Order for Sale to force the sale of the property.
4. Winding-up Petition: If the debt exceeds £750, the creditor can petition for the company to be wound up. This is a severe action and usually a last resort, as it could result in the company being liquidated to pay its debts.
5. Company Voluntary Arrangement (CVA): If the company is insolvent but wants to continue trading, they may propose a CVA. This is a formal agreement with creditors to repay a proportion of its debts over time.
Risks and Considerations
Enforcing a CCJ against a limited company carries certain risks. For instance, the company may not have sufficient assets to cover the debt. Also, if the company goes into liquidation, the creditor may not recover their full debt, as they will be in line with all other unsecured creditors.
Moreover, obtaining and enforcing a CCJ can be costly and time-consuming. Therefore, before applying for a CCJ, it might be worthwhile for the creditor to consider other less formal methods of debt recovery, such as mediation or negotiation.
Enforcing a CCJ against a Limited Company summary
While the process of enforcing a CCJ against a limited company can be complex and challenging, it is sometimes the best course of action for a creditor to recover a debt. It’s crucial to understand each stage of the process and the potential risks involved. Legal advice should always be sought to ensure the correct procedures are followed, and the best possible outcome is achieved.
Common questions asked about enforcing a CCJ
Do I need a CCJ to recover a debt?
No you do not. Debt Collection action can be taken without the necessity for court action. Indeed, on average less than 1% of the cases we deal with require Legal action. However, it is worth pointing out that sometimes obtaining a CCJ maybe appropriate is the debt is disputed or needs to be enforced.
How long do I have enforce a CCJ?
Generally speaking, it is normally six years from the date of judgment. The claimant has the right to enforce the CCJ by whichever means they choose during this time. This applies to recovering debt in Wales, England Scotland or Northern Ireland.
Which is the best option to enforce a CCJ against a Limited Company?
There is no one size fits all. The most appropriate method to enforce a CCJ against a Limited Company depends on each set of circumstances. For instance, it would be a waste of time using High Court Enforcement to enforce a CCJ if the company has no tangible assets.
Am I guaranteed to get paid when enforcing a CCJ?
Unfortunately this is not the case despite what some may say. At Frontline Collections we provide a Free pre-action assessment of the debt to ensure any type of CCJ enforcement is a valid option.
The Limited Company has gone into liquidation, can I still enforce the CCJ?
No unfortunately not. The best thing to do in this situation is to contact the liquidators directly to submit details of the monies owed to you. You may well get something back from liquidated assets etc
Can Frontline Collections help with CCJ enforcement?
Yes we can. We have helped thousands of private individuals and businesses recover what they are owed. When enforcing a CCJ against a Limited company, no two situations are the same. This is why we provide a FREE appraisal of your problem. We will assess the situation and provide the best and most cost effective option to collect on a unpaid CCJ.
How much does it cost for enforcing a CCJ against a Limited Company?
It very much depends on the value of the CCJ and which enforcement option is best for your particular situation. Our Free pre-action appraisal assesses the most cost effective options to collect what you are owed.
Does your company help individuals or is it just Businesses you help?
Yes we have helped thousands of individuals since we started back in 2005. Frontline Collections have helped many private individuals recover what they are owed from Limited Companies. This can vary from refunds not paid back or goods or services not being provided in the first instance.