If someone you owe money
to takes you to court and gets an order or judgement that tells you what you should be paying back to them then they do have the right to expect you to stick with the program. If you don’t meet the conditions imposed on you by the court then don’t simply think that your creditor will shrug their shoulders and leave you alone. They have other weapons in their arsenal to help them get paid.
One of these is the Third Party Debt Order.
This is most often used to ring-fence your bank account -- the order instructs your bank or building society to act as the third party here with the aim of using your funds to pay off your creditors. During this process you won’t be able to withdraw money from your account without permission. This method of debt recovery cannot, however, be used on a joint account unless all parties listed on the account are responsible for the debt in question.
This process can involve having your account(s) frozen for a period of time until a court decides whether to pay the money to your creditor. The judge here will be looking to see whether you have made all your order/judgement payments. If you haven’t met your commitments here then they may well approve the Third Party Debt Order to release your funds to your creditor.
The main problem that many people have with this route is that they don’t find out that their account is frozen until it actually happens. They won’t be notified until the deed is done to prevent them from withdrawing their cash and cleaning out the account. Once the account has been frozen there will be a court hearing where the judge will make a final decision on the case.
You will be allowed to dispute the order up to 3 days before your hearing if you do not agree with your creditor’s claims. If you do dispute what has happened then you should attend the hearing as well where you may be asked to state your case. You are also allowed to ask for funds to be released from a frozen account in some situations.
This is known as a Hardship Payment Order.
The judge will, in this instance, tell the third party holding your account to give you some of the money in the account. You will have to prove that you (or your family/dependants) will suffer hardship without the money, however.
If the judge ultimately finds in favour of your creditor then he/she will order the third party to release the necessary funds to them. This may also include extra money to cover their costs. If, however, you do not have enough funds in your account at the point that it was frozen to cover your debt then the third party can only pay out what was there at that point in time. If funds went in after the account was frozen they have no legal right to use these for this purpose.