Debt Collection – Enforcing a Court Ordered Judgment


Debt Collection – Enforcing a Court Ordered Judgment


Debt Collection – Enforcing a Court Ordered Judgment Many creditors are under the misconception that once they have proved their debt through the court process, and have been successful in obtaining a court judgment against a debtor, then the process of collecting the debt will be automatic, and enforced by a government authority. This is not the case and if the debtor does not pay a court judgment against them, then the creditor is required to choose an option to enforce the judgment, and meet the costs initially (some of these may be recoverable from the debtor later) of pursing the one or more chosen options for enforcing the judgment. The creditor can do this up to 12 years after obtaining the court judgment against the debtor (lesser timeframes for some options). There can be strategic reasons for waiting to enforce a judgment, such as waiting until a debtor is in an improved financial position, and is in an easily located residence and job. Usually though, a diligent creditor will pursue enforcement action soon after the usual 28 day period that the debtor is provided to pay the court judgment. Below are outlined the preferred options for enforcing a court judgment against a debtor.


1. Writ of Execution – Levy of Property

  • Can be used up to 12 years after judgment has been obtained.
  • Encourages repayment of debt, as a Sheriff’s Officer visits the debtor’s residence, and marks their personal goods for impending sale at auction.
  • Economical enforcement option.

2. Bankruptcy Notice

  • Places maximum pressure on individual debtors, with a high percentage of outstanding debts paid after a Bankruptcy Notice has been obtained and served.
  • Debtors commit an act of bankruptcy if they fail to pay within 21 days after service of notice.
  • Available for judgment debts exceeding $5,000.00 for up to 6 years after judgment.

3. Winding Up the Debtor’s Company – Corporate Debtors Only

  • Places maximum pressure on corporate debtors, with a high percentage of outstanding debts paid after commencement of this process.
  • Available for debts of $2,000.00 or more.
  • Can be an expensive option to pursue, but cost-effective for larger debts.

4. Examination Summons

  • Provides valuable information to the judgment creditor about the judgment debtor’s financial circumstances.
  • Can help pinpoint the best recovery option for the debt in question.
  • Brings home to the debtor the reality of the debt, as they are required to attend court to answer questions, and to produce nominated documents.
  • Can accelerate settlement discussions for hard to recover debts.

5. Garnishee Orders

  • Effective where the debtor is owed other debts by third parties – these can be utilised for the benefit of the judgment creditor.
  • Can be used to have a debt repaid in instalments from a debtor’s salary.
  • Many debtors choose to pay the outstanding debt in one lump sum payment, rather than to be reminded of it every time they receive their fortnightly pay.

This provides an overview of options available to creditors to enforce a court ordered judgment. Which is best to use will depend on both the mix of circumstances of the creditor and the debtor, and the quantum of the debt being recovered. If we can assist you with your debt recovery needs, feel free to contact Charly Tannous or Gavin Crank. We can offer flexible fee structures depending on your preferences, and the amount and range of debts that you require to be recovered.