And what can you do if your company needs one?
A stay of execution is a procedure in which the county court suspends the CCJ against a party to consider a payment agreement or have a full hearing over when a debt is due.
If you have had a CCJ registered against your company, which you accept is due for payment, and cannot come to an informal agreement with the high court enforcement officers, applying for a stay of execution is the next logical step.
The stay of execution form, N245, can provide your company with a payment instalment plan if agreed.
Informal arrangements are available if all parties agree, and you negotiate with the high court enforcement officers (HCEO) to pay by instalments. This is a much faster process that submitting an N245 form, but you will need the full cooperation of the creditors and the HCEO. It is also important to not fall behind with payments if an informal arrangement is approved.
Challenging the CCJ
There has been a recent rise in CCJs, which are entered in default, due to the short time to respond. This may be missed if:
- The CCJ has been served at an old address.
- The CCJ was served whilst you are away from the business address.
- Your registered office is with your accountant or another third party and they were unable to send the documents in time.
- You simply did not know how to respond.
If you would like to challenge the CCJ against your company, you must do so at the county court the judgement was first submitted. There will then be a fee to set aside the judgement, and you would need to complete the N244 form. You must act quickly if the CCJ is to be set aside and must provide the specific information as to why the debt is not due.
However, if the creditor has employed high court enforcement officers, you will, generally, need to produce a stay of execution application if they attend the premises, so you should always keep a copy of the application. While some high court enforcement officers may agree not to proceed further pending the application, there is no formal stay until it is ordered by the court.
What to include in your stay of execution
What to include in your application depends on the reason that you are seeking a stay of execution. To obtain a stay of execution, pending consideration of a payment agreement you will need to complete the income and expenditure on the N245 form setting out exactly what you may be able to afford.
Along with the above, you should ask for an interim stay of execution with your application. This will mean that the high court enforcement officers cannot take any further action while you wait for the court to decide whether your payment agreement is acceptable. In the small claims court, this will often be dealt with without a hearing and instead will be dealt with by correspondence.
The judge will request confirmation from the creditor as to whether the payment is acceptable and may request further evidence of your means to pay. Taking all of this into account, they will then decide whether you should be allowed to make payments in instalments, or whether they feel you can pay the debt in full and make the order accordingly.
If you are disputing the debt using form N244, you will need to provide as much information as possible as to why you do not owe the debt. Where possible, you should provide a full defence with a witness statement with documentary evidence as to why the debt is not due. Again you should also request an interim stay of execution pending the hearing.
The court will then provide a date that you must attend court if the judgment is to be set aside. If the CCJ was granted in default and you can persuade the judge that there may be a reason the debt is not due then it is likely that the CCJ will be set aside and the stay of execution granted pending a full hearing.
Stay of execution is granted
If the court grants the order you have sought on form N244, it is likely that the CCJ will be set aside in the short term, and will proceed to a full hearing where you will need to provide your full case as to why the debt is not due. If the court accepts your payment plan from form N245 you must make every payment on time or high court enforcement officers will be able to attend your premises to recover the full balance.
If the stay of execution is not granted and you are unable to pay the debt upfront, or over time, it may be time to consider an insolvency process such, as voluntary liquidation. You may become vulnerable to being accused of trading whilst insolvent.
Our BusinessRescueExperts can provide advice in relation this and all of your other options.