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You have chased someone who owes you money (a debtor) through court and you have won the case. The court has ordered that the debtor owes you the money and has to pay your legal costs. However, the battle is not always over here. Getting a debtor to pay a judgment debt can be as much work as winning in court. A judgment debt is the name of the court’s order to pay you the outstanding debt. Often creditors (the person who is owed money) need to take further legal steps recover their debts. In this article, we explain your options if you want to get a debt paid.

Examine Their Finances

Firstly, find out if the debtor can afford to pay you. You can obtain a court order that requires the debtor to provide documents and answer questions about their financial situation.

The procedure varies slightly in different states, but the general process is the same. With the information you gain, you can decide on the next steps to get the judgment paid.

After examining their finances, you may find that you can order a garnishee order of their wages. You can also find out if they have significant debts, assets or savings. Alternatively, you can find out whether an order to seize their property is an option.

For example, you can find out if they are employed, the name of their employer and how much they earn.

Garnishee Their Wages or Bank Account

A garnishee order can require that the debtor’s employer or bank pay you from the debtor’s salary or bank account. A garnishee order basically instructs a third party, such as an employer or bank, to redirect the debtor’s earnings or holdings to you in order to pay the debt.

Before seeking a garnishee order, you need to get the details of the debtor’s employment or any bank account that they hold. You will need to confirm that the debtor is employed with a certain employer or that their bank account contains sufficient funds to pay the debt. Also, be aware that there are limits on the amount that can be deducted from wages. However, the garnishee order stays in place until the debt is paid.

Get a Court Order to Seize Their Property

If you know a debtor owns property, you can seek an order to sell the debtor’s property at an auction and pay the judgment debt from the sale proceeds. This is called a writ for the levy of property and is an order for personal property only. This includes:

  • cars;
  • boats; and
  • some household furniture.

A property writ cannot include:

  • rented or hired items;
  • clothing and household items that are essential;
  • items the debtor uses to earn a living; and
  • land.

Commence Bankruptcy or Winding Up Proceedings

If an individual owes you more than $5000, you can apply to make them bankrupt. Once they are bankrupt, an appointed bankruptcy trustee will look after their estate. You may be paid if their estate has enough money to pay. Similarly, if a company owes you money and the debt is more than $2000, you can apply to wind the company up.

An appointed liquidator will wind up the company and you may be paid if the company has sufficient assets. Both bankruptcy and winding-up proceedings are expensive to issue. You will only recover the debt if there are enough funds to pay your debt and essential payments. These include payments like those to a secured mortgage or to employees.

Do I Need to Pay to Enforce the Judgment?

Most steps to enforce a judgment require you to make up-front payments such as:

  • court filing fees;
  • sheriff’s fees and;
  • any legal costs.

However, you can add most of these costs to the judgment debt. This way, you recover your costs if the judgment debt is paid. You are also entitled to charge interest on the judgment debt from the date of the judgment until the time it is paid.

Key Takeaways

If you are seeking to chase the payment of a debt, you have a few options, including:

  • seeking a garnishee order from the debtor’s employer or bank;
  • seeking an order to seize the debtor’s property; or
  • commencing bankruptcy or winding up proceedings.

Obtain as much information as you can about a debtor’s financial situation before you spend more on further court orders to chase the debt. An examination is a sensible place to start if you do not have enough information. Unfortunately, there are no guarantees the judgment debt will be paid, so weigh that up before taking the time and expense of further court proceedings. If you have any questions about how to enforce a judgment debt, contact LegalVision’s debt recovery lawyers on 1300 544 755 or fill out the form on this page.


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