Money judgments in possession proceedings for rented property
Landlords may claim rent arrears and costs in possession proceedings and when they take steps to enforce, judgments may appear on the credit reference file.
When a money judgment is made in possession proceedings
Landlords can ask for a court order for money when they apply for possession of a rented property. If the order is granted it is treated as a County Court judgment. Outright and suspended possession orders normally contain a judgment for the amount of the arrears at the date of the court hearing. The judgment may include an amount for costs at the discretion of the court.
It is not possible to request a money judgment when using the accelerated procedure for assured shorthold tenancies.
If the possession order is suspended, the money judgment is suspended on the same terms. If the terms of the suspension are breached, the landlord may apply for an eviction warrant and enforce the money judgment.
Proceedings that have been adjourned do not contain a money judgment unless the court orders otherwise. If the matter is decided at a later date the money judgment is likely to be granted if a possession order is made, whether suspended or outright.
Certain judgment debts attract statutory interest at a rate of 8 per cent. Statutory interest is simple interest.
Statutory Interest runs from the date the judgment becomes payable unless a rule of court or a practice direction say otherwise. Statutory interest may only be charged on debts over £5000 but must not be charged where:
the judgment debt is payable by instalments set by the court, and
the instalments are up to date
If the money judgment has been suspended on terms statutory interest cannot be charged unless the order is breached and the money judgment becomes enforceable.
How a creditor can enforce the judgment
If the money judgment is granted, the landlord becomes a judgment creditor, and the person against whom the order is made is the judgment debtor.
A money judgment can be enforced by a:
warrant of control in the County Court
writ of control in the High Court
third party debt order
attachment of earnings order
An unpaid money judgment may also be used as the basis for a creditor bankruptcy petition if the amount of the judgment exceeds a minimum threshold. Before presenting a bankruptcy petition the creditor must have either:
attempted to enforce the debt by a warrant or writ of control, or
issued a statutory demand
Debtors facing creditor bankruptcy proceedings should seek specialist debt advice and may need to speak to a solicitor.
Writs and warrants of control
If the money judgment is to be enforced by using enforcement agents (bailiffs), the creditor must follow the taking control of goods procedure. This requires the enforcement agent to give the debtor no less than 7 clear days’ notice of the initial visit.
The Taking Control of Goods: National Standards set out the rules of conduct for enforcement agents.
Regulations specify the fees that can be charged to the debtor by the enforcement agent for taking control of goods.
The court that issued the writ or warrant has a general power to stay or suspend enforcement. The debtor can ask the court to suspend enforcement if regular payments are maintained. If the creditor rejects the proposed payment amount the court will set instalments. The court may refuse to suspend enforcement if the proposed payments are too low. The application can be made at any time before goods are removed from the premises.
There are separate processes for suspending warrants and writs of control. There is a court fee for making the application to court.
Suspending a warrant of control
A warrant of control can be suspended by completing form N244 and filing it at the County Court with a financial statement and a witness statement. If the payment proposal is not accepted by the creditor, the County Court will apply the determination of means guidelines to arrive at an instalment amount. If the application is approved, other methods of enforcement of the money judgment are also suspended.
A money judgment made in possession proceedings is not a default judgment, so form N245 should not be used to make the application.
Suspending a writ of control
A writ of control can be suspended by completing form N244 and filing it at the High Court with a financial statement and a witness statement. Unlike applications to suspend a warrant of control, if the application is approved, other methods of enforcement of the money judgment are not suspended.
To suspend other methods of enforcement the debtor must apply separately for an instalment order in the County Court by proposing payments on form N244.
Entry to premises
Enforcement agents can only enter premises by the usual route, normally the door They must not climb through open windows.
The enforcement agent must not force entry to residential premises to enforce a writ or a warrant of control for a judgment debt unless:
the debtor has breached a valid controlled goods agreement, or
a warrant authorising reasonable force has been issued by the court
Third party debt orders
A third party debt order instructs a third party such as a bank or building society to pay money belonging to the debtor to the judgment creditor. Upon receiving the application the court may issue an interim third party debt order without a hearing. The interim order may require the third party to provide evidence of the debtor’s accounts to the court, and to freeze payments or transfers of money.
If the debtor is in hardship they can make an application to the court to release funds to meet the needs of the household. The application is made without notice on form N244.
The matter of the final third party debt order will be listed for a hearing. If the debtor objects to the third party debt order they must file their objections in writing along with evidence at least 3 days before the hearing. There is no specific form for making written objections.
The debtor may object in writing to the third party debt order because:
the money in the account does not belong to them
there is a dispute about how much is owed
the money is required for essential household expenditure
they have made an application to set aside the underlying judgment
A creditor may make repeat applications for a third party debt order.
For information about defending a charging order application see Charging orders.
Attachment of earnings orders
The judgment creditor may apply to court for an attachment of the debtor’s earnings if the debtor is employed. This means the employer deducts the amount specified in the court order and pays it to the creditor. The process is contained in Part 89 Civil Procedure Rules.
An application for an attachment of earnings is made to the County Court Money Claims Centre. The court will serve a copy of the application and the reply form N56 on the debtor. The debtor must reply within 8 days of the date of service of the application.
The debtor may face committal proceedings if the reply form is not completed and sent to the court.
If the court receives a reply form sufficient information about the debtor’s income and expenses a court officer can make the attachment of earnings order. A review of the court officer’s decision can be requested in writing by either the debtor or the creditor within 14 days of service of the order. The review will be transferred to the debtor’s local court for a hearing.
If the court officer does not have sufficient information about the debtor’s income and expenses the matter will be referred to a district judge to make the order or give directions to the parties.
Responsibilities of the employer
The employer can be required by the court to provide details of earnings and anticipated earnings by a date specified by the court before a decision is made. The employer may be liable if deductions are not made in accordance with the order.
Orders to obtain information
A judgment creditor may apply to court for an order to obtain information about the debtor’s means. The debtor will be required to attend a hearing and may be instructed to produce documentation to evidence their current financial circumstances.
Failure to attend a hearing for an order to obtain information may result in the debtor being held in contempt of court. This means the court may issue a fine or a warrant of arrest.
Credit reference agencies and judgments in possession proceedings
Private landlords, providers of credit and insurers will normally carry out a credit check to see whether the applicant has a good record of paying their debts. Information such as electoral role registration and housing status can also be taken into account.
Whether a judgment made in possession proceedings is visible on the judgment debtor’s credit reference file depends on the stage of enforcement.
Effect of judgment on credit reference files
Money judgments made as part of possession proceedings are exempt from registration on the register of judgments, orders and fines. This means they will not show up on a credit reference file. Entry on the register and credit reference files occurs when the creditor takes ‘any step’ to enforce the order.
In this instance, enforcement is limited to the order for the payment of money. This includes all the enforcement methods available in the County Court other than bankruptcy. A warrant of possession is not a step taken to enforce the order.
How to amend a credit reference file
Commercial creditors normally amend a debtor’s credit reference file to show a judgment debt has been satisfied. Smaller judgment creditors such as private landlords may not do this as a matter of course, or there may be a disagreement about whether a debt has been repaid in full.
If the debtor has paid the amount of the judgment debt along with any interest and costs ordered by the court, they may apply for a certificate of satisfaction on form N443. The application should be accompanied with evidence of payment, or an explanation if evidence is not available. The application is sent to the court that issued the judgment.
The court will send a copy of the application to the creditor. The creditor is required to reply within 1 month of receiving the application. If the creditor disputes the debt has been paid the court will set a hearing to determine whether the judgment debt has been paid.
If a certificate of satisfaction has been issued a registered judgment should be marked as satisfied on the register of judgments, orders and fines. The information will be transferred to the debtor’s credit reference file to mark a registered judgment as satisfied.
How to correct information on a credit reference file
A data subject is an individual who can be identified by information that is held about them, for example in a credit reference file. Authorisation is required to view the credit reference file of a data subject. This is usually given by the data subject when they apply for credit, or agree to pre-tenancy checks.
The data subject can complain to their credit reference agency if incorrect information is contained on their credit reference file. If the complaint is not resolved the Information Commissioner’s Office can investigate the matter.
Some data may be correct, but the data subject considers it unfair or misleading. For example, a judgment may show against a person who was jointly liable for rent arrears, but who was not living at the property and did not expect to pay. A data subject can add a notice of correction to their credit reference file to provide an explanation. This should be no longer than 200 words and should be sent to the three credit reference agencies: Experian, Equifax and TransUnion.
The Information Commissioner’s Office website has information about credit reference agencies and data protection.
Last updated: 19 March 2021
s.17 Judgments Act 1838; Judgment Debts (Rate of Interest) Order 1993/564.
Art. 1(2) County Court (Interest on Judgment Debts) Order 1991/1184.
Art. 3 County Court (Interest on Judgment Debts) Order 1991/1184.
Art. 2(b) County Court (Interest on Judgment Debts) Order 1991/1184.
s.42(5) County Courts Act 1984; The judgment can only be transferred to the High Court if the judgment amount exceeds £600.
Currently £5000; The Insolvency Act 1986 (Amendment) Order 2015/922.
s.268(1) Insolvency Act 1986.
See schedule 12 Tribunals Courts and Enforcement Act 2007; The Taking Control of Goods Regulations 2013/1894.
Reg 6 Taking Control of Goods Regulations 2013/1894.
The Taking Control of Goods (Fees) Regulations 2014/1.
For County Court warrants s.88 County Courts Act 1984; for High Court writs s.70 Tribunals Courts and Enforcement Act 2007.
See EX50 for a list of application fees.
Reg 20 Taking Control of Goods Regulations 2013/1894.
Para 19A Schedule 12 Tribunals Courts and Enforcement Act 2007.
Para 20 Schedule 12 Tribunals Courts and Enforcement Act 2007.
CPR 89.8; s.23(2) Attachment of Earnings Act 1971
S.7(1) Attachment of Earnings Act 1971
CPR 71; CPR PD 71.
Reg 9(d) The Register of Judgments, Orders and Fines Regulations 2005/3595.
Reg. 18(1) The Register of Judgments, Orders and Fines Regulations 2005/3595.
Reg. 18(3) The Register of Judgments, Orders and Fines Regulations 2005/3595.
Reg. 19 The Register of Judgments, Orders and Fines Regulations 2005/3595.