In the last article, we discussed the process of having judgement “entered”. That is, that someone owed money (creditor) has been successful in having the court make an order that the debt is owed.
Frequently this occurs when there has been no response from the debtor.
There are a number of remedies available to the creditor. We will look at private debtors, rather than companies.
Today we’ll consider examining a debtors financial situation, and obtaining a garnishee order.
Whilst not really enforcement action, an examination can occur of all of the debtor’s financial affairs. This is not something that can be avoided by the debtor. It is a cost effective way of having documents produced, and enforcement options can become quite obvious to the creditor. Quite simply, the debtor attends the court with all of their bank and asset details, and discusses them with the creditor. If the debtor does not attend the examination he could be arrested.
Enquiries are made to ascertain all personal details, occupation, employer, income, expenses, partner’s details and income, property and other assets, other debts and how much could they afford.
When details have been provided, it might show that the creditor’s best way forward is to garnishee wages or bank accounts.
There is now law to say that a garnishee order attaches wages to the judgement debt until it is paid, but the court will often specify duration. The employer is under an obligation to comply with the order, or the employer itself may have the judgement debt ordered against them. As you can see, court orders are not to be taken lightly.
To recognise the burden placed on employers, a $13 administrative fee can be charged. This $13 fee is eventually carried by the judgement creditor.
It is a requirement that the debtor be left with at least $305 per week to live on.
A garnishee order is just one way of enforcing a judgement debt. Next week we’ll consider some other options. All options should be considered to recoup a judgement debt efficiently. If you have people owing you money, it is quite often the case that your legal expenses are partially accounted for in the judgement.
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This is intended for general information and does not constitute legal advice and should not be relied upon as such. Formal legal advice should be sought.