18/09/12

Helping hand for creditors

Louise Worton, a solicitor in the dispute resolution team at Vertex Law. Kent businesses trying to get money from people who refuse to pay their debts now have a new weapon at their disposal.

Kings Hill-based Vertex Law has welcomed a High Court decision forcing a debtor to take a lump sum from his personal pension fund and to hand it over to his creditors.

“This is a new development in the world of debt recovery and is a welcome addition to the options open to creditors when trying to recover the money they are owed,” said Louise Worton, a solicitor in the dispute resolution team.

The ruling follows a long-running legal wrangle by a group of creditors seeking to be paid the full sum that they had been awarded in the courts.

The claimants, who were victims of a former friend who had committed fraud and forgery, were unable to recover the full judgment sum from the debtor’s real property and shares and looked to the debtor’s remaining asset – his pension fund – to pay the remaining money they were owed.

A High Court judge upheld their argument and gave the creditors’ solicitor permission to withdraw a lump sum from the pension fund which would then be used to clear the remaining debt.

“Unfortunately there are always people who try to avoid paying the money that courts say they owe – and creditors have to take legal enforcement action,” added Ms Worton.

“Looking to a debtor’s pension pot will not be applicable all the time – they may not have one – and is likely to be something you would do as a last resort, but nonetheless the ruling is good news for creditors and will help ensure that money ends up in the right pockets.”