Judges Demand

Whose Assets Can Be Seized?

Published On: 4th October 2013

Individuals and sole traders

Bailiffs and High Court Enforcement Officers can seize any assets belonging to the judgment debtor, including those jointly owned with a with a partner. If the debtor is a sole trader, this can include domestic products and any items that the business owns such as stock.

Exempt from seizure:

  • Bedding, clothing, furniture and provisions that the debtor and their family need for a basic level of domestic life.
  • Perishable goods: refrigerated foodstuffs, fresh flowers etc.
  • Tools of the trade: those needed by the debtor to do their job or run their business, for example tools, books, vehicles etc.

An item is only exempt from seizure as a tool of the trade if it is used only by the debtor. If anyone else uses it, it can be seized – for example a vehicle used by a partner or equipment used by an apprentice.

Limited companies

Any assets belonging to the company may be seized, except for perishable goods.

“Tools of the trade” does not apply to Limited companies or partnerships.

Assets belonging to the Directors cannot be seized unless the director has signed a personal guarantee. It is becoming more commonplace for companies to ask for personal guarantees when supplying goods or services.

If there is a personal guarantee in place, then you will need to sue both the debtor and the guarantor. It is normal practice for the Bailiffs and High Court Enforcement Officers to levy against the company’s debts first, before turning to those of the guarantor.

Partnerships

When a person is invited to become a partner, this is often an equity partnership, where the new partner will invest into the firm. This may be a sum of money, land or a building.

Once transferred to the partnership, this asset is then held jointly by all partners. This can then be seized, along with other jointly held assets.

If unsufficient assets are available to pay the debt, then Bailiffs and High Court Enforcement Officers can seize any personal assets owned by the Partners.

Limited liability partnerships

LLPs are the same as a partnership however, liability is limited to the assets of the partnership. The LLP’s assets may be seized to pay a judgment, but not any of the Partners assets can be seized unless a personal guarantee is the place for that particular Partner.