ENFORCEMENT CHANGES HELP GET MONEY FROM A STONE

The Tribunals, Courts and Enforcement Act 2007 came into force earlier this year on the 19th July 2007 (the Act). The Act amongst other things makes changes to how court orders and debts are enforced. The most notable of these changes are:
   (1) Several changes to existing court-based methods of enforcing debts in the civil courts including changes to Attachment of Earnings Orders and Charging Orders; and
   (2) Increase of powers to obtain information about judgment debtors; and
   (3) Introduction of Debt Relief Orders to help those burdened by debts and financial hardship
   (4) Increase in regulation governing enforcement agents and requirement that such agents (with certain exceptions) hold a valid certificate by a county court; and
   (5) Abolishment of the common law right to seize and sell goods for rent arrears with a new right of recovery exclusive to rent arrears due under a lease of commercial premises (Commercial Rent Arrears Recovery).

The Act identifies weaknesses in the old system

On balance the most helpful of the changes from a commercial and consumer recovery perspective are those relating to court based methods of enforcing debts in the civil courts. The Act identifies weaknesses in the old system and in particular the fact that information provided by debtors was often unreliable. In the case of Attachment of Earnings Orders (AEO) the Act tackles this by making a provision for a new method of calculation of deductions from earnings based on fixed rates.

The other problem with the old system was that if a debtor changes job and did not inform the court of their new employer’s details, the AEO lapses. The Act now enables the High Court, county courts, Magistrates courts and fines officers to request the name and address of the debtor’s new employer from Her Majesty’s Revenue and Customs (HMCR) for the purpose of redirecting the AEO.

Information on debtors can now be requested from the DWP & HMRC

Other notable changes include those to Orders to Obtain Information where under the old system debtors often did not co-operate. The Act now enables the High Court and county courts to request information from the DWP and Commissioners for HMRC, other government departments and/or prescribed third parties (including banks and credit referencing agencies) on a judgment debtor who has failed to respond to the judgment or comply with court based methods of enforcement to assist with the enforcement of a judgment debt. Such information will include name, address, date of birth, National Insurance No. and the name of the debtor’s employer.

For more information on The Tribunals, Courts and Enforcement Act 2007 contact Carlo Pegna on 01992 890391.

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© 2007 Master Collections Ltd