Defendant's application to vary a money judgment

A money judgment is a court order for the defendant to pay a sum of money to the claimant. The judgment is the court's final decision about a claim.

The court can order that the money is paid straight away (forthwith), or it can delay the date of payment. It can order the defendant to pay a set amount every month.[1] This is called an instalment order.

The claimant can apply to court to enforce the judgment if the defendant does not pay the money as ordered.

Enforcement of money judgments

The claimant can enforce a money judgment by applying to court for:

• a charging order on the defendant's property

• a bailiff's warrant to take control of goods

• an attachment of earnings order

The defendant can apply to vary a default judgment to an instalment order. This allows them to pay the debt at a rate they can afford, and avoid some types of enforcement action. The claimant might not be able to enforce the judgment if the defendant keeps to the payment terms under an instalment order.

A creditor can still apply for a charging order if the defendant keeps to payment terms if the judgment was made on or after 1 October 2012.

Statutory interest on judgment debts

A claimant is entitled to statutory interest on a money judgment for a debt that is:[2]

• more than £5,000

• not regulated by the Consumer Credit Act 1974

The claimant is not entitled to statutory interest on a money judgment if the defendant is up to date on the payments under an instalment order.[3] This means a defendant's application to vary a judgment to an instalment order can stop statutory interest from running on the debt.

The defendant can apply to court to vary the payment terms under a money judgment.[4] The application process is different depending on whether the application is to vary a:

• lump-sum payment to a monthly instalment

• rate of payment accepted by a creditor to a reduced rate

• rate of payment set by the court after considering evidence from the claimant and the defendant to a reduced rate

An application to vary the payment terms of a money judgment can be made at any time.[5]

Redetermination of payments

The defendant can apply to court for a redetermination of payments under a money judgment if instalments have been set without a court hearing.

A redetermination is different from an application to vary a judgment because it does not require the defendant to use a specific form or pay a court fee. It is only available for 14 days after the date of service of the order.

The court can set terms for the payment of a judgment debt by instalments without holding a hearing. If a hearing did not take place, the defendant can ask for the rate of payment to be reconsidered by a district judge. This is called an application for redetermination.

The defendant's request must be made in writing within 14 days of the date of service of the judgment. It can be made in a letter and does not have to be submitted on a court form. There is no fee to pay. The letter should state that it is a request for a redetermination under rule 14.13 Civil Procedure Rules. In support of their request, the defendant should provide an explanation of their personal and financial circumstances in a witness statement.

Court hearing for redetermination

If the rate of payment was originally set by a court officer, the defendant's application for redetermination can be decided without a hearing. The defendant can ask for a court hearing if they would prefer to have one. The court can grant the request for a hearing or refuse it.

The court will arrange a hearing to decide the application if the rate of payment was originally set by a district judge. The redetermination hearing is normally held at the defendant's local County Court hearing centre.

The rate of payment is not decided by the court if the judgment is entered either:

• in default, because the defendant did not respond to the claim

• following an offer of payment, which the claimant accepted

The same process for applying to vary the judgment applies in both these situations. This is because in both cases, the court has not made a decision about the rate of payment.

Default judgment

A default judgment is entered when the defendant does not respond to the claim by either defending the claim, or admitting it and offering payments. The judgment debt is payable in a lump sum.

The defendant can apply to court to vary the default judgment so that it can be paid by monthly instalments.[6]

Claimant accepted defendant's offer of payment

A judgment on admission is entered when the defendant makes an offer of payment and the claimant does not object to it. The judgment contains the defendant's proposed payment terms. These were not decided by a court officer or a district judge.

The defendant can apply to court to reduce the rate of payment in a judgment on admission.[7]

How to make the application

The defendant makes an application on form N245. Form N245 contains boxes for the defendant to enter their figures for their income and expenditure. They should use any leftover income to offer a payment to the claimant. If no income is left over, they can enter a nominal offer of £1.

The defendant must send the completed N245 to the court that issued the judgment, along with the court fee. If they are entitled to fee remission, they should send a completed fee remission form and any evidence required.

Court process for deciding the rate of payment

The court sends a copy of the defendant's application to the claimant. The claimant has 14 days to notify the court of their objection. If the claimant does not notify the court to object, the judgment is varied in line with the defendant's offer of payment.

The court officer decides the rate of payment if the creditor objects. They use the Determination of means guidelines to calculate the payment amount, based on the income and expenditure figures the defendant provides.

The claimant or the defendant can apply for the court officer's decision to be reconsidered by a district judge. They must request the reconsideration in writing within 14 days of service of the order.

The court will set a hearing for the claimant and the defendant to attend. At the hearing, the district judge can make whatever order for payment they think fit.

The court can impose payment terms when it makes a money judgment. This is usually done when the defendant makes an offer of payment but the claimant rejects it. A court officer uses the Determination of means guidelines to set the payments under an instalment order. In other cases, the payments may be set by a district judge without a hearing, or following a request for redetermination.

The defendant can apply to court to vary payments set by the court if their circumstances have changed since the rate of payment was set. They cannot apply to vary the payments because they think the court's decision was unfair.

Contents of the defendant's application

The defendant must use form N244 to apply to the court that issued the judgment N244, and pay the appropriate fee. They can enclose a completed fee remission form along with any evidence required if they are eligible for a fee remission.

The defendant's N244 must state the proposed terms of the order and the grounds of their application. It must state the title and reference number of the claim and that the defendant is requesting a variation under practice direction 14.6 of the Civil Procedure Rules.

Practice Direction 23A contains a list of the information that must be contained in an application to court on form N244.

The defendant must also clearly explain their change of circumstances. What counts as a change of circumstances is not set out in legislation. It could include:

• a household member losing their job

• additional dependants in the household

• the need to make payments to a priority debt such as mortgage arrears

The facts and background of the case can be submitted in a witness statement. They must attach a financial statement as evidence and include anything else that could be relevant.

Request a court hearing

The defendant should state on their application if they require a hearing. If they do, they can ask for the claim to be transferred to their local County Court hearing centre.[8]

If the court decides a hearing is required, it notifies the parties along with the date and time of any hearing.

A consent order is made when the claimant and the defendant agree to the terms under a judgment. It is sent to the court for approval. A consent order is binding on the parties as though it had been made by the court.

The defendant can apply to vary the payment terms under a consent order.[9] The court's powers to vary a consent order can be limited if it views the terms of the order as a contract between the claimant and the defendant.[10]

A Tomlin order is a type of consent order that suspends court proceedings on agreed terms, such as keeping to a payment arrangement. The terms are contained in a schedule attached to the court order. The court has no power to vary the schedule attached to a Tomlin order.[11]

Contents of the defendant's application

The defendant must apply to vary a consent order on form N244. The defendant must send their completed form N244 to the court that issued the order, along with the appropriate fee, or a fee remission form and the required evidence.

They must submit a witness statement setting out the facts and background of the case. The defendant's witness statement should explain how the terms of the consent order were agreed upon, and whether anything has happened since to prevent them from making the agreed payments.

Request a court hearing

The defendant should state on their application that they require a court hearing. A hearing is likely to be necessary to explain the circumstances of the consent order to the district judge, and answer any questions about the information contained in their witness statement.

The claimant can apply for a warrant or writ of control to enforce an unpaid judgment debt. A writ or warrant of control allows Enforcement Agents (bailiffs) to take control of the defendant's goods.

The defendant can make an application vary the judgment if the claimant has applied for a writ or warrant of control.

Warrant of control issued by the County Court

The County Court can deal with an application to vary payments under the judgment and to stay enforcement of a warrant at the same time.

Form N245 contains a box for the defendant to tick, which asks the court to suspend a warrant of control on the same rate of payment as the money judgment.

If the application to vary the judgment must be made on form N244 because payments were originally decided by the court, the defendant must specify they want the court to suspend the warrant on the terms they have proposed.

Writ of control issued by the High Court

The County Court cannot deal with an application to suspend a writ of control when they receive an application to vary a judgment. The defendant must make a separate application to the High Court to stay execution of the writ of control.

A stay of execution means the enforcement of an order is put off to a specified date or until a specified event occurs.

The defendant must make an application on form N244 to the High Court and pay the appropriate fee. They must submit a witness statement explaining the facts of the case and reason for their application. The witness statement must refer to a signed statement of income and expenditure which shows their financial situation.