Third Party Debt Order Being Used By Lenders
I read an interesting piece in The Times on Wednesday 2 December about a rise in creditors seizing debts from third parties. In this article it states that creditors are taking a more aggressive approach to recovering debts from their borrowers.
According to the article, there has been a 24% rise in the number of applications by creditors for third party debt orders.
So how does a “third party debt order” work? Simply put, if a creditor has a judgement for payment awarded in their favour, the creditor can seek a third party debt order if the debtor fails to pay the amounts as per the judgement order.
This debt order could then mean that anyone that owes you (the debtor) money, could have to pay the money directly to the creditor that has obtained the third party debt order, with the remaining balance being paid back to you as the debtor. This would mean you would have no way of wriggling out of paying a debt once the creditor had obtained a county court judgement against you.
This must be a frightening prospect for anyone that thought they could get away with ignoring a CCJ and hoping that eventually the creditor would give up, if I knew that as a creditor I could obtain a third party debt order, I would most certainly use it to ensure I got my money back.