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Debt Recovery – What to do if the debtor doesn’t pay up

Show me the $$$ – Enforcement proceedings part 1

Many judgment debtors will pay once judgment has been given, but what happens if they don’t?

You may need to initiate enforcement proceedings.

We will discuss two ways in pursuing enforcement proceedings below in part 1 of our Debt Recovery article series.

Investigation hearing

An investigation hearing is a hearing before the Registrar of the Court to ascertain the judgment debtor’s financial position and their capability to pay the debt.

The judgment debtor is required to bring to the hearing proof of income and fill out a form which summarizes their financial position. This statement covers expenses such as income, bills and rent etc. You (the judgment Creditor) will have the opportunity to question the debtor on this information during the hearing. The registrar will then consider their ability to pay their debts and can make an order for the debtor to pay instalment payments to you.

Examination hearing

If the judgment debtor fails to comply with two payments in accordance with the order made at the investigation hearing you can apply for an examination hearing to be held. During the hearing, the debtor will be given the chance to explain why they have not complied with the order from the investigation hearing. If their circumstances have changed (i.e. health or personal related reasons), the instalment payments could be modified. However, an order for imprisonment may be made for contempt of court for having no valid reason to comply with the order. This will however not affect their obligation to pay the debt.

Pro Tip 1: Don’t wait until the last minute. Debtors can sometimes take years to pay back what they owe. You have 15 years from the date of the judgment to enforce the debt. However, if the debt is over 6 years old, you would need to seek the leave/permission of the Court to proceed with enforcing the debt.

Pro Tip 2: When pursuing debt enforcement proceedings, interest is payable on the debt until it is fully paid. Our solicitors are able to assist you with this.

We will address other types of enforcement proceedings in our next debt recovery article given the multitude of options available to you. Make sure to follow us on Facebook and subscribe to our e-newsletter for the next instalment in our Debt Recovery article series.

If you or someone you know requires assistance in recovering a debt, please contact us on 08 8210 5400 for a no obligation Free First Interview at one of our 4 easy to reach locations across Adelaide.

Today's blog article has been written by

Today's blog article has been written by

David Tan

Solicitor
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