Enforcing a judgment, money order, or a registered adjudication or QCAT decision is complicated and expensive if not done correctly.
Stonegate Legal’s debt enforcement lawyers can help you through the complicated process of enforcing a judgment, money order, or an adjudication or QCAT decision over the property of the judgment debtor.
Your options for enforcing a Judgment:
- Enforce the judgment in the Court with jurisdiction;
- Serve the debtor company with a statutory demand; or
- Serve the debtor person with a bankruptcy notice.
If you have been given judgment and the debtor still does not pay, then you will need to start enforcement action against the debtor to recover the judgment debt
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Enforcing a Judgment in the Court with Jurisdiction
Your options for enforcing the Judgment in the Court are:
- Attempt to extract from the debtor information regarding its financial position; or
- Apply to the Court for the issue of one of the various types of enforcement warrant.
Attempting to extract information regarding the debtor’s financial position
If the debtor provides documents showing any assets they own, the equity in those assets, and details of any debts owed to them, this method of enforcement has achieved its purpose.
If you are not satisfied with the contents of the completed statement of financial position, or the debtor does not return one at all, a creditor can then apply to the Court for an enforcement hearing summons order.
An enforcement hearing summons order is a Court order requiring a debtor to complete a statement of financial position (if they have not done so), produce substantial documents regarding their financial position, and appear in Court for the purpose of being cross examined about their financial position.
If the debtor does not show up to the enforcement hearing (which is quite common), then you are able to apply to the Court to issue an enforcement hearing warrant (arrest warrant). The enforcement hearing warrant allows the Court enforcement officer to attend at the debtor’s address (with or without the police) to arrest the debtor and force him/her to attend the hearing.
The main purpose for an enforcement hearing is to gather enough information from the debtor to be able to apply for an enforcement warrant.
Your option to apply to the Court for the issue of one of the various types of enforcement warrant is explained below.
Issuing an Enforcement Warrant when Enforcing a Judgment
The most common type of enforcement warrants that can be issued by the Court to enforce the Judgment are:
- Enforcement warrants for seizure and sale of property; and
- Enforcement warrants for redirection of earnings and/or debts.
Enforcement warrants for seizure and sale of property
Section 828 of the Uniform Civil Procedure Rules 1999 (QLD) allows for Enforcement warrants for seizure and sale of property.
To issue a warrant for seizure and sale of property, the Court will need evidence showing what property is owned by this debtor and the equity in that property.
Enforcement warrants for redirection of earnings
Section 855 of the Uniform Civil Procedure Rules 1999 (QLD) allows for Enforcement warrants for redirection of earnings.
To issue a warrant for redirection of earnings the Court will need to be provided with evidence whether the enforcement debtor is employed and the enforcement debtor’s employer has been identified; whether the enforcement debtor has sufficient means of satisfying the order after deducting, the necessary living expenses of the enforcement debtor and the enforcement debtor’s dependants; and any other known liabilities of the enforcement debtor.
Serving the Debtor with a Bankruptcy Notice
If a judgment debtor is a person owes a judgment debt of over $5,000.00 then a creditor can ask the Federal Circuit Court to declare the debtor bankrupt.
To declare the debtor bankrupt the creditor must prove to the Court that debtor has committed an act of bankruptcy.
If the debtor fails to follow the instructions in a bankruptcy notice then the debtor has committed an act of bankruptcy, allowing you to present a creditor’s petition to the Federal Circuit Court.
Serving the Debtor with a Post-Judgment Statutory Demand
As outlined above, when enforcing a judgment, if the judgment debtor is a company you have the option to serve this debtor with a statutory demand for payment of the debt under section 459E of the Corporations Act 2001 (Cth). If this debtor is served with a statutory demand, it will have twenty one days to:
- Comply with the demand; or
- Apply to the Court for an order setting the demand aside.
If the statutory demand is not set aside and the debtor does not comply with it, then the debtor is presumed to be insolvent for three (3) months. While the debtor is presumed to be insolvent, you may apply to wind it up on the grounds of insolvency.
What can you do when Enforcing a Judgment
If you instruct us to arrange for the judgment debtor to attend an enforcement hearing and produce documents or things relating to its financial position, it is possible the debtor might reveal information that would enable you to enforce the Judgment against it using one of the procedures described earlier in this advice.
However, there is no guarantee that any useful information will be revealed. In particular, this process will not reveal whether the debtor has the ability to raise funds (by borrowing money for example) to pay the debt.
Conversely, in our experience, debtors who have the ability to raise funds to pay their debts usually take steps to avoid being forced into bankruptcy or being wound up.
For these reasons, we recommend serving the debtor with a bankruptcy notice or a statutory demand in most cases.
If you have been given judgment and the debtor still does not pay, then you will need to start enforcement action against the debtor’s property to recover the judgment debt