Debt Recoveries Australia
Enforcing a Judgment Debt in Victoria
Written by: Nicholas Phibbs- Solicitor at ADC Legal
Received a court order for a monetary sum (Judgment Debt) against a Defendant (Debtor) in the Magistrates Court of Victoria (Court) but the Debtor still refuses to comply?
Unfortunately, this is a scenario that occurs all too often, fortunately though, there are a number of legal options available to you to enforce a Judgment Debt.
Before commencing enforcement proceedings against an individual or company however, it is important to consider the financial position of the Debtor and their ability to pay the debt in the first place.
Enforcement proceedings can be both time consuming and expensive. There is no point spending more money on legal fees attempting to recover money the Debtor simple does not have.
One legal option to discover the financial position of the Debtor is through a Summons for Oral Examination of a Judgment Debtor.
An Oral Examination requires the Debtor to attend Court and under oath provide financial
information including but not limited to;
- a) the amount and source of any income the Debtor receives;
- b) any property and assets the Debtor may possess;
- c) any cash that is readily available to the Debtor or that can be made so available;
and
- d) all debts, liabilities and other financial obligations of the Deb
If the Debtor fails to appear at the Oral Examination an arrest warrant can be issued compelling the Debtor to attend.
Once the financial position of Debtor is established, the Court allows the debt to be enforced in a number of different ways including;
- a) a warrant to seize property;
- b) an attachment of earnings order; and
c) an attachment of debts o
See also: Late payers can kill your business – Here’s a debt collection guide on how to stop them!
Warrant to Seize Property
This warrant is valid for 12 months and gives authority to the Sheriff to go to the Debtor’s
home or business address in Victoria and demand payment of a Judgment Debt. Seized
items will be sold at public auction and the proceeds will be forwarded to you up to the value of the Judgment Debt owing.
Attachment of earnings
If the Debtor is employed, the Court can make an order that requires the employer to deduct specified amounts from the Debtor’s pay cheques until the Judgment Debt is paid. If the
employer fails to comply with a binding order, the you may apply to the Court to have the
order enforced against the employer instead of the Debtor.
Garnishee Orders
If the Debtor holds money in a financial institution, such as a bank, the Court can make an
order against the financial institution known as a garnishee order. This order requires the
financial institution to pay monies held in their institution to the you rather than to the Debtor.
Installment Orders
If after an Oral Examination, it is clear that the Debtor does not have the means to pay the Judgment Debt in full the Court may decide an instalment order is the best course for the Debtor to service the Judgment Debt.
It is not only the Court that can order an instalment agreement, either party at any time post judgment can apply to the Court for an instalment order. While an instalment order is in
force and being complied with, it operates as a stay of execution for the Debtor.
Bankruptcy
The final option in recovery of a Judgment Debt is through personal and corporate
insolvency regimes. The effects of the bankruptcy are quite severe that it can be quite an effective way of enforcing a Judgment Debt. However, bankruptcy proceeds can also be expensive and very technical with strict compliance to requirements and deadlines.
Limitations
If enforcement proceedings are not successful in recovery the Judgment Debt within the first few months of the judgment it does not necessarily mean you should give up. A Judgment Debt in Victoria is valid for 15 years from the date of the judgment and enforcement
proceedings can be brought against the Debtor at any time within this time limit.
A Debtor’s circumstances can change dramatically over the course of 15 years, a Debtor may gain employment or receive an inheritance from a family member and then is able to service the Judgment Debt.
Email: email@debtrecoveries.com.au
Call Us: +61 1300 799 511
 | About the Author In 2002, Adam Stewart established Debt Recoveries Australia Pty Ltd, a debt collection agency specialising in the insurance claims industry. Adam has worked in the fields of motor vehicle insurance and debt recovery for over 12 years, working with some of the largest insurance and debt recovery companies in Australia. Read more |