• What is a Third Party Debt Order (TPDO)?

    Formerly known as ‘garnishee proceedings’, a third party debt order (or TPDO) is used to enforce a money judgment whereby a judgment creditor wants to recover funds from any third party that might owe money to a judgment debtor; to enable recovery directly from that person.

    What types of debt can be attached to a Third Party Debt Order (TPDO)?

    There are various types of debt that can be attached to a TPDO. Most commonly, a TPDO might be made against the judgment debtor’s bank. However, the creditor would need to know the details of the bank (the third party in this example) and the amount that the debtor holds in the account; which is not the easiest information to obtain. If you do not hold this information regarding the judgment debtor, it might be advisable to consider an alternative method, such as enforcement by Writ of Control (formerly known as Writ of FiFa). For information on enforcing a Writ of Control in the High Court please call us on 0333 344 1548.

    For creditors looking to recover the judgment debt by deduction from wages or salary, an Attachment of Earnings would be a suitable alternative.

    What restrictions apply to a Third Party Debt Order (TPDO)?

    The third party debtor needs to be within the jurisdiction of the courts of England and Wales. This could include a temporary physical presence at the time of making the interim order.

    TPDO’s are not subject to time limitations such as the six year expiry rule for a Writ of Control.

    How is a Third Party Debt Order (TPDO) obtained?

    If the judgment creditor knows of money that is owed to the judgment debtor by a third party they can make an application, without notice, for a TPDO using Form N349. As part of the application for an interim third party debt order, the judgment creditor must include a “statement of truth” to verify the application.

    Please note; applications for TPDO’s are treated as urgent by the courts and will usually go in front of the Master (or district judge) on the day of application. In some cases, the interim TPDO is granted the same day.

    At first, the TPDO is issued on an interim basis. A hearing will then be required to decide whether or not the TPDO should be made into a final order, which when enforced would allow the creditor to collect the money owed to them from the third party named on the order.

    Making an application for a Third Party Debt Order (TPDO)

    Applications must be informative and provide evidence to support them. For example, creditors may wish make an Order to Obtain Information (OTOI) to ensure they have the information needed to succeed in their application for a TPDO. One thing to bear in mind here is that if you do request an OTOI to gather information and evidence on the judgment debtor, it is wise to do this first then immediately apply for an interim TPDO as the information will be more accurate at this time and there is less chance of assets being concealed.

    What terms are served of the judgment debtor by an interim TPDO?

    An interim TPDO, which is binding once served on a third party, will state that a hearing will take place on a given date to decide whether the interim order should be made into a final TPDO. It will also state that until the hearing the third party must not make payments to the judgment debtor that will reduce the debt enough to prevent the judgment creditor from being able to recover their money (and the fixed-costs for the TPDO application) from the third party by way of the TPDO.

    The interim TPDO will be issued on Form N84. The hearing will follow not less than 28 days after the interim TPDO is served.

    A third party should not make any payment without authorisation until a final TPDO has been made or they run the risk of paying it twice.

    How do you serve an interim Third Party Debt Order (TPDO)?

    An interim TPDO must be served on different parties, at different times;

    • Third party – not less than 21 days before the date fixed for the hearing
    • Judgment debtor – not less than seven days after a copy has been served on the third party but a minimum of seven days before the date of the hearing

    If the creditor serves the interim TPDO, they must file a certificate of service prior the hearing not less than two days before. They must then provide the certificate of service at the final hearing.

    What happens if the third party disputes the claim?

    If a third party (not a bank or building society) disputes owing the judgment debtor money, they must notify the court (and creditor) in writing once the interim TPDO has been served on them. They have seven days to do this. If the court is not notified they will assume the claim is correct and the money is owed and can make the final TPDO.

    Please note, bank and building societies are treated differently so please seek legal advice for assistance in obtaining a TPDO against a debtor’s bank or building society.

    What happens is a judgment debtor has their bank account frozen and cannot access funds?

    For judgment debtors who have their accounts frozen by the interim TPDO, Hardship Payment Orders (HPO) can be obtained so the cost of basic living can be covered and ensure that they do not suffer hardship as a result. An HPO would allow the bank to make payments to cover the cost of basic living expenses. To apply for a HPO, the judgment debtor must make an application and include evidence explaining why the debtor needs a payment made and this must be verified by a “statement of truth”.

    What is the outcome of the final hearing for a Third Party Debt Order (TPDO)?

    There are a number of outcomes of a hearing of the final TPDO and these are;

    • The granting of a final TPDO
    • The discharging of the interim TPDO and terminating of the application
    • An order could be made to resolve any disputes between any of the parties (or any person
    • who makes claim to the money specified in the interim TPDO – this could be in the form of a trial)

    If the third party was not present at the hearing, they could apply to have the final TPDO set aside.

    What is the effect of final Third Party Debt Order (TPDO)?

    If an order is made for the third party to pay the judgment creditor the money specified on the order and they refuse to pay, the final TPDO can be enforced against them – for example, by getting High Court Enforcement Officers (HCEOs) to enforce a Writ of Control.

    Who pays the costs of a Third Party Debt Order (TPDO) application?

    If successful, the costs of the application are likely to be awarded to the creditor and be recovered as part of the order. If TPDO application is unsuccessful, the creditor is likely to be ordered to pay the costs including those of the third party (if they have occurred any expenses) so it is worth considering the risk of cost before pursuing this method of enforcement.

    Please note that costs are paid in priority of the debt unless stated otherwise.

    How does this affect the third party?

    Generally speaking, the third party who owes the judgment debtor money will be willing to co-operate as they are not losing anything (provided they actually owe the sum demanded to the judgment debtor).

    What other enforcement action can I take to enforce my judgment?

    A popular and cost-effective method of enforcement is using High Court Enforcement Officers (HCEOs) to enforce a Writ of Control, which allows the HCEOs to take control of and remove goods belonging to the defendant (the debtor) and sell them at auction in order to recover the money owed. For more information please call us on 0333 344 1548.