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So you have gone through the court process and have a court order against someone who owes you money. But, what are the next steps to ensure the debtor pays you the judgment debt? Unfortunately, success in court proceedings is no guarantee that you will get your money. There are a number of further enforcement steps you need to take to force the debtor to pay you the money. In Victoria, these range from an examination of the debtor’s financial situation to seizing their:

  • property;
  • salary; or
  • funds held in bank accounts.

This article will explain the enforcement options available through the Victorian court system and what steps you can take to force the debtor to pay you the judgment debt. 

What Is a Judgment Debt?

A judgment debt, also called a money judgment, is a court order which follows court proceedings. One party issues it claiming a debt from another. The order can be against an individual or company. It includes the amount of money the debtor must pay the other party. It usually includes interest and the legal costs of the party who issued the legal proceedings. 

A judgment can follow a full court hearing, where the order is against the unsuccessful party. Or, a court can make a ‘default’ judgment against a party who does not respond to a legal claim issued by a party. A judgment is usually registered on an individual’s or company’s credit rating and can affect their ability to obtain finance or other financial steps. 

Do Your Research First

The first step in enforcing a judgment is doing some research on the debtor to confirm if they have assets to pay the judgment debt. Whether they are an individual or a company, it is important to check if they have the means to pay your debt. If not, you may need to explore alternative insolvency enforcement options, such as:

In Victoria, the courts allow judgment debtors to be examined by creditors about their financial situation, including about their:

  • income;
  • assets; and
  • debts. 

You can apply for an examination order, also called a Summons for Oral Examination in Victoria, that requires the debtor to appear in court and be questioned about their assets and liabilities and provide copies of financial documents, such as bank statements and tax records. If the debtor is a company, a director or other representative of the company must attend court.

Following your application, the court will issue an examination order with a date the examination will be in court. You need to personally serve this order on the debtor, who must attend court for the examination. A registrar in the court usually conducts this examination, and you will be provided with the results. If the debtor fails to attend the examination, the court can issue a warrant for their arrest to appear at another examination date. 

Enforcement Options in Victoria

You should consider any information you have about the debtor’s financial situation before choosing an enforcement option. 

For example, do they own real property? Do they have permanent employment?

You can apply to the court for the following orders, and each involve various procedural steps.

Warrant to Seize Property

This is a court order that gives authority to the sheriff to go to the debtor’s home or business and seize property to the value of the judgment debt. In a home, this does not include items of basic comforts, such as a fridge, television or washing machine. If the debtor is a company, this includes company assets such as company cars. Any seized items will be sold at public auction. You will then receive the proceeds up to the value of the judgment debt. 

Warrant of Seizure and Sale

If the debtor owns real property you can apply for a warrant to force the sale of the debtor’s real property. This can usually be done only if the seizure of other property owned by the debtor will not satisfy the debt. After making an order, the sheriff will arrange for the sale of the property by auction with a reserve price based on a valuation of the property. If more than one party owns the property, the sheriff can sell only the share the debtor owns.

Attachment of Debt

You can apply for an order that any money the debtor holds in a bank account be seized to satisfy the judgment debt. You will need details of the bank name, account number and the funds available in the account, before making the application. This is the type of information an examination obtains

Attachment of Earnings Order 

You can make this order against any individual debtor who earns a salary. You can apply for an order that the debtor’s employer must deduct instalments from the debtor’s salary and pay them to you. The court will limit those instalments to a percentage of the debtor’s salary only.

Instalment Order

You can apply for an order that compels the debtor to repay the debt by way of weekly, fortnightly or monthly intervals. The debtor can also make their own application for an instalment order. 

Costs and Interest

All enforcement options involve additional court fees and you may also use a lawyer to assist with the application process. You can add these extra fees and legal costs to the judgment amount when making the order, so the debtor must also pay this back as part of the enforcement. Also, post-judgment interest continues to accrue until the judgment debt is paid in full, so post-judgment interest will also be added to the judgment amount when the court makes any enforcement orders.

Key Takeaways

Chasing debts is a costly and time-consuming process. It can be surprising and frustrating to discover that getting a court order or judgment is no guarantee of getting paid. However, the enforcement options available in Victoria can all assist in securing as much of the debt as the debtor can afford to pay. While it does take extra time and cost, you can claim back any legal costs you incur in the process. If you have any questions about options to enforce a judgment debt in Victoria or need other assistance to recover a debt, contact LegalVision’s litigation lawyers on 1300 544 755 or fill out the form on this page.  


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