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i The advice on this page applies to residents in England and Wales only.

What is a third party debt order?

If you have a County Court judgment (CCJ) and you don’t make the payments the court has ordered, your creditor can apply for a third party debt order.

This orders someone who owes you money to pay it to the creditor instead. This is most commonly used to make your bank or building society pay money in your current or savings account to your creditor.

It can also be used to take lump sums from redundancy payments or endowment policies, although this is rare.

Third party debt orders only apply in England or Wales, but similar actions can be taken in the Scottish courts and Northern Irish courts.

A third party debt order can be applied to all types of debt, including overdrafts, credit cards and personal loans, but only if the creditor has a CCJ and you’ve not paid the instalments the court told you to.

Third party debt orders are not used often and if you don’t pay a CCJ it’s much more likely your creditor would use bailiffs (enforcement agents), a charging order or attachment of earnings.

You may find creditors refer to a ‘garnishee order’, the old name for a third party debt order.

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How does a third party debt order work?

Firstly the creditor applies to the court for the order. A fee of £110 will be added to your debt and the court will write to your bank or building society telling them to freeze your account. Your bank or building society can also charge you up to £55 when they freeze your account.

A week later the court will send you a form called an N349 Interim third party debt order telling you that the money in your account has been frozen.

Only the amount of money in your account at the time of the application is frozen. Any money paid in after this is not frozen and you can withdraw it. If the amount in your account is more than the CCJ and court costs only that amount will be frozen and you can withdraw anything extra.

The interim third party debt order will include a date and time to attend your local County Court hearing centre. You’ll get at least 28 days’ notice.

At the hearing a judge will decide whether to make a final third party debt order. If the judge agrees to do this, your bank or building society will pay the frozen money to your creditor.

If you don’t want the final third party debt order to go ahead you can explain your reasons to the court at the hearing.

For example, you could object to the order if your whole monthly wage has been frozen if this has left you unable to afford your essential living costs and payments to other priority debts.

Hardship payment order

If you need the frozen money in your account to cover essential living costs, such as food, you can apply to the court to release some of it. This is called a hardship payment order.

There’s a fee of £255 to apply for this but if you’re on a low income this fee can be reduced or waived. Please call our debt helpline if you need advice on applying for a hardship payment order.

Joint debts and third party debt orders

A creditor can’t use a third party debt order to take money from a joint bank account if the debt is just in your name.

However if the debt is also in the same joint names as the bank account they can use a third party debt order, and the rules above apply.