After receiving a judgment in Court which orders a debtor to pay a sum of money, the debtor is required to pay it immediately or as ordered by the Court. However, just because a Court has made orders requiring them to pay you money, this doesn’t always mean you will be paid immediately, or soon. A common misconception is that once a judgment is made, that’s the end of the legal proceedings.
The reality is that after receipt of the judgment, most creditors still find that they need to take steps to enforce the judgment so that you are paid promptly, or at all. This is where our Sydney debt recovery lawyers can help you enforce the judgment or debt and recover the money for you were a debtor is still refusing or neglecting to pay.
Some of the enforcement options include seizing assets, property, or money from their bank accounts or from their wages, as well as issuing a bankruptcy notice or creditor’s statutory demand which might compel them to pay.
Methods of enforcing a judgment or debt
Examination Notice and Examination Order
An examination notice is a legal notice where you ask the debtor various questions about their income, expenses and assets to determine their financial position and can be served on a debtor after judgment has been made. If the debtor ignores the examination notice, does not fill it out properly or provide all the documents you have requested under the examination notice, then you can apply for an examination order.
An examination order is where you make an application for the debtor to be brought before the Court and examined and asked questions about their financial position. The Court will look at whether they have any assets to satisfy the judgment and determine their financial position. An agreement can also be made between the parties to for the debtor to pay the debt by instalments.
This is an application in Court which seeks orders that allow or direct a third party (such as a bank or employer) to seize funds from the debtor’s bank account, held under contract or owing in wages.
A debtor’s bank or employer might be directed to pay money on the debtor’s behalf, from their bank account or from their wages, to the creditor, in satisfaction of part or all of the debt. There are serious consequences if the bank or employer fail to pay the money, such as being made liable for part or all of the debt.
Writ of execution of property
A Writ of execution of property authorises the Sheriff’s Office to attend the debtor’s address and seize property owned by the debtor and sell it at public auction. A writ of execution is valid for 12 months from the date of issue.
While the Sheriff has the authority to seize various property from the debtor, some property is exempt from being seized.
Bankruptcy Proceedings (Individual)
If the debtor who is an individual person has insufficient funds or assets to pay all of his debts as and when they fall due, you may consider commencing bankruptcy proceedings.
Prior to commencing proceedings, there would need to be an ‘act of bankruptcy’. The most common act of bankruptcy is the failure of the debtor to comply with a Bankruptcy Notice.
For more information, see Bankruptcy.
Wind-up proceedings (Company)
If the debtor is a company, you could consider serving on them a creditor’s statutory demand. This is similar to a bankruptcy notice, except they are not used on individuals but on companies that owe undisputed debts over $2,000.
If the debtor fails to pay the debt under the demand within 21 days or make an application to set aside the demand, the company is deemed to be insolvent, which can be relied upon in a wind-up application to deregister the company. Failing to respond to a statutory demand can have serious consequences, and should only be used in limited circumstances and after receiving legal advice.
For more information, read the following articles or pages on insolvency:
- Creditor’s statutory demands;
- Creditor’s petition;
- I have been served with a Creditor’s Statutory Demand – What should I do?
How can we help?
At Rockliffs Lawyers we go above and beyond to achieve a practical, sensible and cost-effective result. We pride ourselves on our success rate and our ability to resolve matters without the need of having to go to Court, making the process quicker and cheaper for you.
Our friendly team will always be available to update you on your matters and guide you in the simplest form possible so you are aware of all issues and possible outcomes of any actions.
If you need help enforcing a debt, get in touch with our experienced debt recovery lawyers in Sydney.