Insolvency arises when a company faces challenges meeting its debt obligations on time. When a company’s debts outweigh its available cash flow, …
Recovering a judgment debt may involve:
You must follow a state or territory court process to recover the judgment debt.
If someone has been ordered to perform or refrain from an act (other than paying money) and they do not comply, you may also be able to take steps to enforce that order.
You will have the same remedies for enforcing a judgment debt as in the Supreme Court of the state or territory where the judgment is made. You will have to follow the enforcement procedures of the relevant Supreme Court.
While the terminology may differ between states and territories, the following methods of enforcing a judgment debt are broadly available.
A debt is incurred when there’s a clear legal obligation for one party to pay money to another, and the debtor fails to fulfill this obligation. Common scenarios leading to debts include lending money with an agreement for repayment, unpaid invoices for goods or services, or outstanding payments under a lease agreement.
However, there’s a dispute regarding the legitimacy of the debt, such as disagreement over contractual terms or service quality. In that case, there might be better solutions than debt recovery. For instance, if a contract stipulates payment upon project completion, but the quality of work is disputed, the issue may involve contract breach or negligence rather than straightforward debt recovery.
Before initiating debt recovery proceedings, seeking legal advice is prudent to ascertain the appropriateness of this course of action, ensuring the chosen approach aligns with the legal nuances of the situation.
A Court Order, also known as a Court Judgment, signifies that a debtor owes money to a creditor following legal proceedings. Once obtained, the Court Order allows the commencement of enforcement proceedings in the relevant State or Territory. Enforcement of Court Orders typically lasts up to 12 years, except in Victoria and South Australia, where it extends to 15 years.
When can a creditor enforce a court order for debt recovery?
Once you’ve secured a judgment against the Defendant, you can promptly initiate enforcement proceedings. Typically, it’s advisable to inform the Defendant of the judgment and prompt them to consider payment arrangements or settle the debt in full. Transferring the judgment may be necessary if the Defendant resides or conducts business in a different State or Territory from where proceedings began. However, this procedural step should help your enforcement rights.
When exploring the enforcement avenues for a Court Order, it’s essential to consider whether to pursue local court systems within the State or Territory or opt for Bankruptcy for individual Defendants or Company Winding Up for corporate Defendants. The choice of enforcement method significantly impacts the recovery process. While each State and Territory offers its array of enforcement options, there needs to be a unified framework across Australia. Simplifying these options into broader categories, we have Garnishee Orders, which direct third parties to repay debts; Examination/Payment Arrangements, where debts are settled through installment payments; Seizure of Goods, involving the retrieval of valuable assets by the Sheriff; and Security Against Property, which allows debt security against real estate. Additionally, Bankruptcy applies to individuals with debts exceeding $10,000, while Company Liquidation is for corporate entities with debts over $4,000.
Once a judgment or money order has been filed and registered in the Court, you (the ‘enforcement creditor’) can apply to the Court to issue an enforcement warrant to recover the debt.
The main types of warrants are:
Other types of warrants include:
Operating a small to medium-sized business can be highly personally and professionally rewarding. However, it also has the potential to present some challenging situations, especially when a debtor is unable or unwilling to pay money for products or services provided.
Unfortunately, if the amount is significant, you can potentially lose valuable time, resources, and money on legal fees when attempting to recover your debts. That’s the bad news. The good news, however, is at least a portion of your legal costs can be recovered from your debtor in many instances. So, as a business owner, it’s important to be proactive to protect yourself.
The key to getting your debt paid is engaging with a company with extensive experience across Australia and who is well-versed in various enforcement options. Kingsford Lawyers practices nationwide for some of Australia’s leading corporations, financial institutions, and insurance companies.
Kingsford Lawyers offers a range of services, including funded legal costs, ensuring our interests are aligned with the recovery of your debt. Learn more about our litigation services today.
Contact us today for an obligation-free chat at 1300 244 342 or email admin@kingsfordlawyers.com.au, and one of our litigation lawyers will handle your situation.
Insolvency arises when a company faces challenges meeting its debt obligations on time. When a company’s debts outweigh its available cash flow, …
Bail conditions play a crucial role in the Australian legal system, influencing the freedom and responsibilities of individuals awaiting trial. This comprehensive …
Understanding Insolvency in Australia Insolvency occurs when an individual or a company cannot meet their financial obligations as they come due. This …
WE SPEAK – ENGLISH, ITALIAN, MANDARIN, MACEDONIAN, POLISH, AND RUSSIAN
55 Hudsons Road, Spotswood VIC 3015
2 Currumburra Road, Ashmore Qld 4214
E-13, UPSIDC, Site-IV, Greater Noida India
343791 York House, Green Lane West,
Preston PR2 1XB
© Copyright 2024 KINGSFORD LAWYERS | ALL RIGHTS RESERVED
Reach out to us, and let’s work together towards a solution that brings you peace of mind and a positive step forward.
