Third party debt orders: from an interim bank freeze to the final-order hearing

Why there are two stages

Part 72 allows a final order requiring a third party within the jurisdiction to pay the creditor the debt due or accruing due to the debtor, or enough to satisfy the judgment debt and application costs. A final order cannot be made without an interim order first.

Bank freeze is useful shorthand, but it can obscure the mechanism. The interim order directs the third party not to make a payment reducing what it owes the debtor below the specified amount. It is a restraint linked to that sum, not an immediate transfer or a declaration that the whole account belongs to the creditor.

For the creditor, the first stage can preserve a potential recovery while evidence is assembled. For the debtor and third party, it brings defined obligations and an opportunity to raise objections or another person’s claim. Treating the interim order as final collapses that distinction.

The N349 application must be evidence-based

An application may be made without notice, and the application notice must be verified by a statement of truth. Practice Direction 72 requires Practice Form N349. The later service and hearing requirements still apply.

The application must identify the debtor, judgment, outstanding sum, any overdue instalments where the debt is payable by instalments, and third party. For a bank or building society, it must give branch and account details or state what is unknown. It must confirm the basis for believing that the third party is within the jurisdiction and owes or holds money for the debtor, identify other known claims and applications, and give the sources or grounds for those beliefs.

Speculative applications are not permitted. An interim order against a bank or building society requires evidence substantiating the belief that the debtor has an account there. An unknown account number is therefore different from an unknown bank: missing details may be acknowledged, but the underlying belief still needs evidence.

N349 includes sections for the judgment debt, third party, other interests, sources and grounds of information and other applications, followed by a statement of truth. A creditor should distinguish what a banking record shows from what is merely inferred.

The interim order and service timetable

A judge initially considers the application without a hearing. An interim order fixes the final-order hearing at least 28 days after it is made and specifies the amount to be retained: the unpaid judgment sum plus fixed application costs. It becomes binding on the third party when served. The order date and service date therefore do different work.

The interim order, application notice and supporting documents must be served on the third party at least 21 days before the hearing. Debtor service must be not less than seven days after third-party service and not less than seven days before the hearing. A creditor serving the order must file a certificate of service at least two days before the hearing or produce it there.

A chronology of judgment, N349, interim order, both service steps, bank response and hearing prevents the 28-day minimum interval from being mistaken for a complete service plan.

What the bank must do within seven days

A bank or building society served with an interim order must search for all accounts held with it by the debtor. Within seven days it must tell the court and creditor each account number and whether each account is in credit. For each account in credit, it must say whether the balance covers the specified sum and, if not, give the balance at service. It must also disclose any right it asserts to the money in such an account, including set-off, with grounds.

If the debtor holds no account, or the institution cannot comply for another reason, it must report that within the same period. The rule’s example is uncertainty where multiple account holders match the order’s details. An identification response is not the same as disclosure of a balance.

Unless the order states otherwise, the ordinary duty concerns accounts held solely by the debtor, or specified sole or joint accounts of joint judgment debtors. The Practice Direction does not require retention or disclosure for an account held jointly by the debtor and another person. That defines the standard bank duty; it does not decide beneficial ownership of particular money.

The response helps the creditor assess whether a relevant account exists and whether the bank asserts its own right. For the debtor, it is evidence to check before the hearing. The rule requires disclosure to the court and creditor. Account details should be handled carefully and shared only as needed for the proceedings.

Objections and competing claims need written evidence

A debtor or third party objecting to a final order must file and serve written evidence stating the grounds. Knowledge or belief that someone else claims the specified money must also be set out in written evidence. A creditor disputing a third party’s notice that nothing, or less than the specified sum, is owed must file and serve written grounds.

That evidence must reach the court and each other party as soon as possible and at least three days before the hearing. If notified of another person’s possible claim, the court will serve that person with notice of the application and hearing. The timetable does not favour leaving a new point for an oral surprise.

A third party other than a bank or building society must notify the court and creditor in writing within seven days of service if it claims to owe nothing or less than the specified amount. Each position should be tied to documents showing the debt, account or competing claim.

At the hearing the court may make a final order, discharge the interim order and dismiss the application, decide disputed issues or direct a trial. A final order is therefore possible, not automatic.

When hardship payments can be sought

If an individual debtor cannot withdraw money because of an interim order, and the debtor or family consequently suffers hardship in meeting ordinary living expenses, the court may permit one or more hardship payments and specify the payee. This targets living expenses rather than generally releasing the balance.

The application needs detailed evidence explaining the amount requested and a statement of truth. The debtor may apply to only one court. Unless otherwise ordered, it must be served on the creditor at least two days before the hearing but need not be served on the third party.

In exceptional urgency, an application may be made without notice to the creditor, and a judge decides whether to proceed without service or direct it. If proceeding without service, the judge should normally, where possible, ensure the creditor is informed and can make representations. Appropriate documents such as bank statements, wage slips and mortgage statements should prove financial position and need.

A focused application identifies the essential expense, amount, payment date and supporting evidence. That presents a concrete question rather than a general complaint about inconvenience.

What a final order changes

A final third party debt order is enforceable as an order to pay money. Payment or enforcement discharges the third party’s debt to the debtor to the extent paid or realised, even if the third party debt order or original judgment is later set aside.

The final order does more than continue the restraint: it supplies the enforceable payment obligation and defines the discharge when payment or enforcement follows. Recovery under it is limited to the amount paid or realised.

Before the hearing, each side should work from the same core record: judgment balance, N349 and supporting grounds, interim order, service evidence, bank response, objections and any hardship application. Keeping their distinct functions clear makes the live issues easier to identify.