Third party debt orders

If a judgment creditor thinks that you have the money to pay and are holding it back or have some money due to you or expect to get  lump sume which would cover the debt, they can apply for a third party debt order to take the money you owe them directly.

Usually the order is made against your bank or building society that is holding your money for you. However, they can also apply for an order if you are due to get a lump sum such as:

  • an inheritance;
  • an insurance payout;
  • a redundancy payment;
  • a settlement.

With the order, the creditor could get your employer, solicitor or insurance company to pay the money to them instead of you.

A creditor can only take enough money to clear the debt.
A judgment (CCJ) or court order (such as a costs order) is required to be able to apply for a third party debt order.
Money can also be taken from your account to cover child support or maintenance payments arrears and no court order is required.

A judgment creditor can apply to the court for an order to obtain information to find out details about your bank accounts, savings or whether you are expecting a lump sum payment. See enforcement for more details about information orders.

The process

bankThe first step is to apply for an interim third party order which prohibits the third party (such as your bank) from making any payment which may reduce the amount available to less than what you owe to the creditor plus the cost of the application. This has the effect of freezing your account but no money is taken. The interim order is made ex-parte (without notice) so as to prevent you from withdrawing money.

The interim order is made final at a hearing which must be at least 28 days after the interim order is made. If you wish to object to the final order, you must file a witness statement with any evidence setting out your objecton, at least three days before the hearing.

Upon receipt of the interim order, a financial institution must search for any accounts in your name, freeze them and provide details to the court and the creditor within seven days. The bank can deduct £55 from your account towards admin costs.

An order cannot be made against a joint account if the other account holder is not liable for the judgment debt.
Only money that’s in your account at the time the bank received the interim order is affected, it doesn’t freeze money paid in at a later date.
If the account is overdrawn at the time the order is received, no payment will be made and money paid in after that cannot be used towards the judgment debt.

Hardship payment order

If the third party debt order is causing you and your family hardship in meeting ordinary living expenses, you can apply to your local court for a hardship payment order. The application is made on FormN244 and a fee is payable, however, you may qualify for fee remission. See EX160a fee remission.

Explain how other family members are being affected, such as children or an elderly or disabled relative living with you. Fill in the form and take it to court yourself with evidence such as:

  • statements
  • payslips
  • mortgage account statements
  • rent book or any other proof of rent being paid
  • any other relevant documents.