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Other options for Enforcement of a Judgment Debt

You may wish to consider other orders to enforce the payment of a debt. These can be made at any time after the investigation hearing. Other orders will not be made if there is a payment agreement in place from the investigation or examination hearings.

  1. Warrant for sale

    A warrant for sale can be issued in relation to either the debtor’s real property (land) or personal property (such as non-essential household items). To apply for a warrant of sale, fill in and file a Request to Registrar (Form 18). You can obtain a Form 18 from the Magistrates Court Registry or from the Magistrates Court website. If the debt is under $10000, the creditor must apply to the Court first and go before a Magistrate to explain why the debt should be paid from the sale of the debtor's property.

    Very few warrants for sale of real property will proceed to sales as the debtor will usually pay the outstanding amount before the property goes to auction.

    If you wish to apply for a warrant of sale of real estate you must first do a search at the Lands Title Office to discover whether the debtor owns any land (there is a small fee for this service) and enter the details of the title on the form. You must also give a written undertaking that you will pay for any costs involved in the auction of the property. These costs are recoverable from the debtor upon sale of the land.

    A warrant for sale of personal property authorises a Sheriff’s Officer to enter the debtor’s address and seize property of sufficient value to cover the debt. Certain items such as cars under a certain value, ordinary clothing and necessary household goods cannot be seized. Items which are under finance or jointly owned will not be seized. If the debtor is bankrupt, their property cannot be taken.

    Only about a third of warrants for sale for personal property are successful in recovering any money at all. Therefore you should consider whether it is worth applying for a warrant for sale given that there are costs to issue and the carry out the warrant. Try to find out whether the debtor owns more than one car or any valuable assets.

  2. Charging order

    A charging order allows the court to charge the property of a debtor. This means that the debt will be registered on the real estate of the person or on the assets of a company. If the property is sold then it will be subject to the charge and you have priority over the owner for the proceeds of the sale.

    To apply for a charging order you will need to do a search at the Land Titles Office to identify any property owned by the debtor. You will then need to make a Form 21 application. In the space provided write “charging order over (name of property) for the judgment debt of $...”.

  3. Garnishee order

    This is an order requiring direct payment to a creditor. Wages can only be garnisheed with the consent of the debtor and Centrelink payments cannot be garnisheed. However, money held in a bank account can be ordered to be paid to a creditor without the debtors agreement. Seek legal advice on the correct procedure for a garnishee order.
  4. Bankruptcy

    If the debt is for more than $5000 you may start bankruptcy proceedings against the debtor. If a person is declared bankrupt then all of their property (with exceptions similar to those for a warrant of sale) comes under the control of a trustee. You may then lodge proof of your debt (the judgment) with the trustee to receive a share of the profits from the sale of the debtor’s property if the debtor owns anything of value.

    Before you commence bankruptcy proceedings consider whether the debtor owns enough property to make declaring them bankrupt worthwhile. If they own real estate (check at the Lands Title Office) or if they have a position that they will lose if declared bankrupt, then the threat of bankruptcy may force payment of the debt. The cost of bankrupting someone should also be considered.

    The first step in bankruptcy proceedings is usually to serve the person with a Bankruptcy Notice. A Bankruptcy Notice is a form requiring the debtor to pay the debt within 21 days. This form is available on-line from the Australian Financial Security Authority (formerly ITSA). The cost of issuing a Bankruptcy Notice changes every year so it is wise to check the AFSA website fees and charges page for any updates.

    Once 21 days have elapsed from the service of the Bankruptcy Notice on the debtor, a creditor’s petition must be lodged in the Federal Circuit Court. There are fees associated with filing a creditors petition, which can be claimed back from the bankrupt estate, assuming that there are any assets for the trustee to seize. Current court filing fees for bankruptcy matters can be checked on the Federal Circuit Court's website fees page.

    Sending someone bankrupt is a complex and expensive process. You should seek independent legal advice before commencing bankruptcy proceedings. Further information on bankruptcy proceedings can be obtained from the AFSA website Sending someone bankrupt page. Information about filing creditor’s petitions is available at the Federal Court Registry, Level 5, Roma Mitchell Commonwealth Law Courts Building, 3 Angas Street, Adelaide or from the Federal Circuit Court website creditor's petitions page.

  5. Winding up a company

    Winding up a company is the equivalent of declaring a person bankrupt, although the end result for the company is that it is usually liquidated and then de-registered. If your judgment debtor is a company, you should seek legal advice from a private law firm regarding how to go about issuing the right documents. If a company has no assets and many creditors, spending the money on issuing winding up proceedings does not guarantee that your judgment debt will be paid, and you may also not recover your associated costs.
Other options for Enforcement of a Judgment Debt  :  Last Revised: Fri Dec 9th 2016
The content of the Law Handbook is made available as a public service for information purposes only and should not be relied upon as a substitute for legal advice. See Disclaimer for details. For free and confidential legal advice in South Australia call 1300 366 424.