A writ for levy is one enforcement action you can take to recover a judgment debt in New South Wales that you are owed. You will likely find selecting the most effective enforcement action to be challenging. This article aims to assist by presenting an exploration of the pros and cons associated with issuing a writ for the levy of property. Further, you will find out what steps you need to take to obtain this writ.
What Is a Writ for Levy of Property?
A writ for levy of property, also recognised as a writ of execution against goods, represents a court-issued order. It allows the NSW sheriff to seize and liquidate property owned by your debtor to pay the debt owed to you. A debtor’s goods will become legally bound to the sheriff from the time the sheriff receives the writ.
What Property Can Be Seized?
Not all property can be seized, only certain property types can be seized. Items that the sheriff can seize include:
- any goods or personal property where the debtor has a beneficial interest;
- money belonging to the judgment debtor;
- cheques, bills of exchange, promissory notes, bonds or other securities; and
- land held by the judgment debtor, provided the judgment debt is more than $20,000, (a writ of execution for land also requires a number of additional steps to be taken).
Items that are protected by bankruptcy laws and cannot be seized include:
- clothing;
- kitchen items (e.g. heating and cutlery);
- toiletries;
- large furniture and beds;
- children or student’s educational and sports items;
- at least one television set, stereo equipment, radio, video recorder;
- washing machine and clothes driers;
- refrigerator and freezers;
- safety equipment like fire detectors and extinguishers;
- tools of trade required by the debtor to earn an income; and
- motor vehicles required for transport (unless the value exceeds $8,100).
The Pros of a Writ for Levy of Property
The pros to a writ for levy of property include:
- when looking to enforce a judgment debt, there is no court filing fee payable upon application for a writ for the levy of property. This makes issuing a writ a relatively inexpensive enforcement option;
- it is a court-enforced procedure, which makes it more credible and enforceable;
- having a sheriff turn up at the door can be an intimidating experience for your debtor. In many instances, it can prompt your debtor to make payment or reach out to negotiate a payment arrangement with you; and
- if your judgment debt is relatively small, a writ for levy of property can be a relatively easy way to receive payment.
The Cons of a Writ for Levy of Property
The cons to a writ for levy of property include:
- there is no way to find out what assets your debtor owns prior to issuing a writ, unless you have first-hand knowledge about your debtor’s assets;
- the process for executing the writ can be relatively slow, dependent on the sheriff’s workload;
- it may be difficult to seize sufficient assets to satisfy a large judgment debt, unless your debtor has significant assets; and
- if you cannot satisfy the judgment debt, you may require alternate enforcement action.
Process for Obtaining a Writ for Levy of Property
You must have a judgment entered against your debtor before you can issue a writ for the property levy.
Once you have a court judgment, an application is made to the court via a notice of motion writ for levy of property, together with an affidavit in support.
The motion and affidavit must set out the:
- details of your court proceedings;
- debtor’s name, address and telephone number;
- total amount, if any, paid by your debtor in reduction of the judgment debt;
- interest amount on the judgment debt since the judgment date;
- enforcement costs you are claiming; and
- best times the sheriff is likely to find your debtor at home (if known).
It must also include a list of:
- any known items of value owned by your debtor; and
- anything dangerous at your debtor’s home (if known).
Once the motion and affidavit have been signed, the documents must be filed with the court. There is no court filing fee, but you will be required to pay the sheriff’s execution fee (currently $100 for each address at which, and each occasion on which, execution is effected or attempted, plus 3% of the proceeds of enforcement).
The court will consider your application and if accepted, will issue the writ. The court does not require you to appear in court. Next, the court will send the writ to the sheriff’s office closest to your debtor’s address. The sheriff will then reach out to you to discuss any additional fees and address any potential issues that may arise in the process.
What Does the Sheriff Do?
Once the sheriff receives the court-issued writ, they may reach out to your debtor or visit their residence to inform them of the writ. In the event that your debtor does not intervene to halt the execution of the writ, the sheriff will return to compile a list of seizable items, affixing tags to them. Typically, the sheriff refrains from immediately seizing these tagged items, affording your debtor a final chance to take corrective action and prevent the sale of their property.
It is a criminal offence for your debtor to dispose of or damage any of the tagged property.
The sheriff will return later to remove the tagged property to sell it. The sheriff will hold a public auction to sell the seized property. They must take reasonable steps to ensure the items they sell obtain a fair price. The amount made in the sale at the auction will go towards the judgment debt and the sheriff’s costs.
If the amount recovered is insufficient to cover the judgment debt and the sheriff’s costs, the sheriff can re-attend at your debtor’s property and seize additional items until they can pay the full judgment debt. A writ for the levy of property will remain valid for 12 months.
If the sheriff determines that your debtor does not have any seizable property, you will be advised in writing.
Whether you’re a small business owner or the Chief Financial Officer of an ASX-listed company, one fact remains: your customers need to pay you.
This manual aims to help business owners, financial controllers and credit managers best manage and recover their debt.
Key Takeaways
Like all enforcement options, there are pros and cons to issuing a writ for the property levy. Before you apply to the court for a writ for levy of property you should carefully consider several factors. One factor you should consider is whether the writ is likely to result in you being paid by your debtor. An additional factor you must consider are the financial and legal implications of you launching a proceeding.
If you need help understanding whether a writ for levy of property suits your circumstances, contact our experienced insolvency lawyers as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 1300 544 755 or visit our membership page.
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