In some debt recovery cases, it may be possible to apply to the court for a freezing injunction, which prevents the debtor from disposing of assets without paying the debt.
Freezing injunctions are usually applied for before proceedings commence and a judgment is obtained – some debtors will try and minimise their assets before court action by transferring them or disposing of them.
It is possible, however, to apply for a freezing injunction during proceedings.
There are two types of freezing injunction available:
In some debt recovery cases, a freezing injunction can also be used if it is possible fraud is involved – this might apply in cases involving asset tracing.
The injunction can be used to “ring fence” certain assets so they cannot be disposed of or transferred before or during a court hearing.
If assets are held by a bank or a third party on behalf of the debtor, the freezing injunction can apply to that party, also, to prevent disposal or transfer of the asset.
Duncan Lewis civil litigation solicitors can advise on applying for a freezing injunction at any stage of the debt recovery process – and can act swiftly to protect a client’s interests.
Applications for a freezing injunction will be considered by the court – if the freezing order is granted, the creditor may be liable for any losses to the debtor if at a later stage the court decides the injunction should not have been granted.
It is also advisable to consider applying for a freezing injunction at an early stage of proceedings, as failure to do so might lead to the court deciding that a freezing injunction is not necessary.
There are also different ways in which a freezing injunction can be used – the injunction could, for example, be applied to a specific asset such as a property; or it could apply to all the debtor’s assets.
If a debtor breaches a freezing injunction, the consequences are serious – the court can impose a fine or even a prison sentence and assets may be seized by the court.
Applying for a freezing injunction can be a lengthy process and Duncan Lewis advises clients considerable this option to contact them as soon as possible.
For expert legal advice on debt recovery and Freezing Injunctions, call Duncan Lewis Civil Litigation Solicitors or 0333 772 0409.