18 Sep Debt recovery for businesses: Part 2 enforcing your judgement debt

Part 2  of Debt Recovery Series

Checking What Assets and Income the Debtor has before you enforce your judgement

SUMMONS FOR ORAL EXAMINATION (SOE)

• The SOE is best utilized if you have no information about the debtor’s financial position.
• If you obtained a judgement debt, on your request and for a small fee, the Court’s Registrar (the Registrar) will issue a Summons against the debtor requiring the debtor to appear in Court with all relevant documentation to be examined on oath about their financial position.
• In practice a questionnaire will also be served with the Summons on the debtor to answer and return on the SOE hearing date and is generally conducted by the Registrar or Deputy Registrar of the Court.
• The SOE can be served on an individual as well as an officer of a company.
• If the debtor fails to appear after being served with an SOE a warrant may be issued for the arrest of the debtor, to compel their attendance at a further hearingdate.

Pros of SOE’s:

• You are able to gain information about the debtor’s financial position before undertaking further more expensive enforcement options
• it is relatively quick and cheap if you can locate the judgment debtor and serve them with the SOE.

Cons:

• May be a waste of time as the information provided at the SOE may not assist with the debt recovery.
• Debtor may lie, not bring documents or pretend they are lost and you only have their word
• You may be putting them on notice of further enforcement steps to be taken rather than taking them by surprise

ATTACHMENT OF DEBT ( also known as a Garnishee Order)

• This procedure has the effect of taking monies which are owed to the debtor by a  third party and ordering that the third party pays their debt to the debtor’s creditor.

Examples of what may be attached:

o   Rent going to a debtor;

o   Tax rebate cheque;

o   Bank/Building Society/Credit Union Accounts;

o   Trading Accounts;

o   Current Accounts; and

o   Savings Accounts.

Examples of what may not be attached:

o   Money in the hands of the Crown;

o   Funds in Court;

o   Purchase monies from the sale of real estate before acceptance of title.

ATTACHMENT OF EARNINGS

• This procedure requires the debtor’s employer to deduct instalments from the debtor’s wages and forward those monies to the creditor.
• It is not an available option if the debtor is only in receipt of Centrelink payments.

There are 3 methods of obtaining the required information:

o   Write to the employer to obtain the information (employer is unlikely to respond and if they do respond they may be in breach of Privacy Laws);

o   Obtain an order from the Court directing the employer either to provide particular details; and

o   File and serve upon the employer a summons to witness to appear at Court and to provide conduct money.

INSTALLMENT ORDER

• This is an order for payment by installments under the Judgment Debt Recovery Act

1984 (Vic).

• Either the debtor or creditor may apply for this type of order from the Court but the  debtor must examined by the Court before an order can be made.

• An installment order stays (delays) the execution of the original order!

MORE INFORMATION ABOUT RECOVERY OF DEBTS

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