Reading time: 4 minutes

So you have finally obtained a judgment against your debtor! But what if they still refuse to pay? Obtaining a judgment against a debtor is sometimes only the first step in making them cough up the cash. Unfortunately, it may be the case that the debtor simply does not have the funds to pay you. In those circumstances, enforcing the judgment is similar to ‘getting blood from a stone’. However, if you believe that your judgment debtor has the funds or necessary assets to pay you, there are a number of approaches you can take.

Examination Notice/Order

An examination notice/order is helpful when you are unsure of the judgment debtors financial position. An examination notice is a specified court form which can be sent to the judgment debtor requiring them to answer questions about their assets, income, and any other debts. This information can be used to ascertain the best way to enforce the judgment. However, in practice, judgment debtors rarely complete the examination notice.

The next step is to apply to the court for an examination order. An examination order requires the judgment debtor to attend court and answer questions and provide documents evidencing their financial position.

Garnishee Order

A garnishee order is an order made by a third party, who either holds money on behalf of the debtor or owes money to the debtor. For example, garnishee orders can be addressed to the:

  • Debtor’s bank – for money held in the debtor’s bank account. It is difficult to obtain a garnishee order unless you have sufficient information in respect of the debtor’s bank account(s). If you are successful in obtaining a garnishee order in this regard, all money held in the account (at the date of the order) will be sent to you, less a processing fee. If the amount recovered does not satisfy the entire debt, you can make an application to the court for an additional garnishee order.
  • Debtor’s employer – for the debtor’s wages/income. A garnishee order to an employer requires the employer to take an amount from the debtor’s wage and pay it directly to you. The judgment debtor must be left with a minimum amount of living expenses per week. This amount is prescribed by the court and is currently $480.50 (as at 1 April 2016). The garnishee order will continue to operate until the judgment debt has been paid in full.

Writ for the Levy of Property

A writ for the levy of property is a court order requiring the local sheriff to seize and sell personal property of the judgment debtor. This order does not extend to land. Property that can be seized includes cars, boats and some household furniture. Property that will not be seized includes clothes, kitchen and bedroom furniture and tools of the trade, which can include some vehicles.

The writ continues to operate for 12 months. After that, you are entitled to apply to the court for a further writ. In circumstances where a judgment debtor refuses to allow the sheriff entry to the premises, preventing them from seizing any goods, you may need to make an application to the court allowing the sheriff (and police) to use force to enter the premises.

Bankruptcy and winding up proceedings

If the debt is over $5,000, it is possible to make an application to have an individual made bankrupt. Similarly, if the debt is over $2,000, winding up proceedings can be commenced against a debtor company. You can find additional information about bankruptcy and winding up proceedings by searching other LegalVision articles or by contacting our office.

Interest and Legal Costs

When enforcing a judgment debt, you are entitled to claim from the judgment debtor post-judgment interest which is charged at a prescribed rate. You are also entitled to claim legal costs of enforcing the debt. This can include filing fees, costs associated with service and solicitors fees. These amounts are either prescribed or capped.

***

Our specialised litigation team can provide you with advice and recommendations on your most practical and effective enforcement options. Contact our office to obtain a fixed fee quote from one of our client care team members.

Webinars

Raising Capital: Getting Investment Ready

Tuesday 6 April | 12:00 - 12:45pm

Online
Are you a founder or business owner looking to raise capital? Attend this webinar to learn the strategies to prepare your business for investment.
Register Now

The COVID-19 Vaccine Rollout: Considerations for Employers

Thursday 22 April | 11:00 - 11:45am

Online
Are you a business owner or employer? Attend this webinar to learn about what you need to know about the COVID-19 vaccine rollout.
Register Now

About LegalVision: LegalVision is a tech-driven, full-service commercial law firm that uses technology to deliver a faster, better quality and more cost-effective client experience.

The majority of our clients are LVConnect members. By becoming a member, you can stay ahead of legal issues while staying on top of costs. From just $119 per week, get all your contracts sorted, trade marks registered and questions answered by experienced business lawyers.

Learn more about LVConnect

Need Legal Help? Get a Free Fixed-Fee Quote

If you would like to receive a free fixed-fee quote or get in touch with our team, fill out the form below.

  • 2020 Excellence in Technology & Innovation – Finalist – Australasian Law Awards 2020 Excellence in Technology & Innovation Finalist – Australasian Law Awards
  • 2020 Employer of Choice – Winner – Australasian Lawyer 2020 Employer of Choice Winner – Australasian Lawyer
  • 2020 Fastest Growing Law Firm - Financial Times APAC 500 2020 Fastest Growing Law Firm - Financial Times APAC 500
  • 2020 AFR Fast 100 List - Australian Financial Review 2020 AFR Fast 100 List - Australian Financial Review
  • 2020 Law Firm of the Year Finalist - Australasian Law Awards 2020 Law Firm of the Year Finalist - Australasian Law Awards
  • Most Innovative Law Firm - 2019 Australasian Lawyer 2019 Most Innovative Firm - Australasian Lawyer