Third party debt orders
What is a third party debt order?
A third party debt order works by freezing money held in an account for the debtor and retrieving the money held on the day of the order for the claimant. Typically, this means freezing the debtor’s bank account but it can apply to money held by another person for the debtor.
What do I need to issue a third party debt order?
Issuing a third party debt order is more complicated than the other options available to you so you will need more information.
You will need:
- the debtor’s name and address
- the total amount of the judgement and the total amount of arrears if the judgement requires payments in installments
- the amount still owing from the judgement after any costs or interest attached
- the name and address of the third party. If the third party is a bank or building society you will need the Head Office address as well as the branch address for the account, sort code and debtor’s account number (if known).
- details of any previous third party debt orders you have issued for this judgement
- anybody else you know of that may have an interest in this money
You will need a debtor who has failed to pay a judgement in full or has missed at least one instalment for a judge to make an order.
All of this information should be entered on the N349 form and normally it is sent to the closest court to the debtor’s home address along with a cheque for £110 made out to HM Courts & Tribunal Service.
What happens after I have applied for the third party debt order?
Provided you have given all the information the judge requires they will issue the third party with a notice. Within 7 days you should receive details on whether or not the money being claimed is owed to the debtor. If the order is made to a bank or building society you will receive details of Any account details, if the account has enough money to satisfy the judgement and whether any charges or restrictions exist that would allow the bank to withhold some of the money.
The debtor will then be informed that the account has been frozen and a hardship payment may be requested to allow the debtor to meet their day to day living expenses.
A hearing will be called to allow the judge to decide whether the money should be paid to you. If they are satisfied they will order the money be paid to you. This can either be for the judgement in full or a part payment depending on how much money is available in the account. If money is still outstanding you may apply for another third party debt order at a later date for the remaining balance.
When should I use this?
The third party debt order requires forethought and planning. If you know when a debtor will be paid or that they are owed money by a specific person then this is a great method of getting the money owed to you.
If you are unsure about when the debtor is paid you should avoid using this method however as there are no guarantees that there will be enough money on the day the account is frozen to make up the cost of the third party debt order.