Briefing

Enforcement of Financial Orders on Divorce: What can you do if your ex doesn't pay?

Posted by: Tessa Bray | Date posted : 22/03/2017

It is important to think about security and enforcement at the time of settlement and drawing up a financial order.  A party can ask for security where there is a risk of someone not complying, and when sums are secured, enforcement becomes much easier.

If, having obtained an order, the other party defaults, there are a number of methods of enforcement. If the judgment creditor knows which specific method of enforcement they want to apply for, they can apply to the court directly for that. Alternatively, the judgment creditor can make an application asking the court to determine the appropriate method of enforcement.

Specific methods of enforcement

If the judgment creditor chooses how to enforce, s/he may apply for any of the following: -

Judgment summons – a judgment debtor who has failed to pay a matrimonial debt, if he has the means to pay but refuses to do so, can be committed to prison for up to 6 weeks or earlier compliance with the order. The burden of proof in such an application is to the criminal standard, beyond all reasonable doubt, rather than the civil standard, which is on the balance of probabilities. It is essential that the law and procedure are complied with to the letter or the application will fail or be set aside.

Where a person's liberty is at stake, they cannot be required to give evidence (and incriminate themselves) and they have the right to remain silent. They must be informed of that right. They are also entitled to legal aid so that they can be represented, and must be informed of their right to claim legal aid.

Attachment of earnings order – if the judgment debtor is employed, this is easy to do and highly effective. It provides that a proportion of the judgment debtor's earnings be deducted by the employer and be paid direct to the judgment creditor until the judgment debt is paid. It works best for maintenance as it may take a long time to pay off a lump sum. However, the threat of someone's employer finding out that the employee has not complied with an order is often enough to make the judgment debtor pay!

Third-party debt order – this is where sums owed to the judgment debtor that are in the hands of a third party, such as a bank account, are frozen and seized for the benefit of the judgment creditor. It is very effective but obviously only if the judgment debtor has a credit balance in his/her account. The third party and the debt must be in the jurisdiction. One cannot apply for this type of order against a joint bank account.

Charging order – this is used to secure a debt over the judgment debtor's beneficial interest in land, securities, or certain other assets. It does not actually result in payment, but once the charging order is made, it provides security and the judgment creditor can apply for an order for sale of that property. The threat of that is often sufficient to make the judgment debtor pay the debt.

Writ or warrant of execution – execution against goods requires the court to issue a document that commands an enforcement officer (bailiff) to seize and sell a judgment debtor's goods and raise sums to satisfy a judgment debt. The difficulty with this is ascertaining ownership in case the items have been purchased on hire purchase, for example.

Freezing order – this can be obtained following a final order in order to preserve the assets until judgment has been enforced. It is a particularly draconian order and the correct procedure must be followed. Such an application must not be taken lightly. It is not a direct method of enforcement, but the judgment debtor's property will remain frozen until the judgment debtor has paid the debt.

Asking the court to determine the method of enforcement

The court may make any of the following orders once it has heard evidence about the judgment debtor's means:

• Attachment of earnings;

• Third-party debt order;

• Charging order;

• Writ or warrant of execution;

• Appointment of a receiver.

If the judgment creditor asks the court to decide, the court cannot make an order for committal to prison. That is because someone cannot be compelled to give evidence where their liberty is at stake. Interestingly, the judgment creditor must pay the judgment debtor's travel expenses to attend court if requested. If the judgment debtor fails to attend court a "suspended" committal order can be made for failing to attend. Any breaches of the terms on which the committal order is suspended can result in the judgment debtor being sent to prison.

Conclusion

It is clear that the court has extensive and wide ranging powers to force a judgment debtor to pay. However, a deceitful judgment debtor who is seeking to evade the court's powers may go to extreme lengths to avoid being forced to comply. It is essential that proper consideration is given to any application for enforcement to secure the asset and ensure the judgment debtor is not given the opportunity to put it out of the judgment creditor's reach.

If you require further information on anything covered in this briefing please contact Tessa Bray (tessa.bray@farrer.co.uk , 020 3375 7571) or your usual contact at the firm on 020 3375 7000. Further information can also be found on the Family Team page on our website.

This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.

© Farrer & Co LLP, March 2017