Did you see our blog on “What remedies are available to deal with debtors?” That dealt with the options available to pursue your debtor for payment. Once you followed one of those options and judgment is entered against the debtor then there is the process of recovering the judgment debt, which may also include costs awarded by the court, from the debtor.
There are several enforcement procedures available to a creditor. For debts under $25,000.00, the first available enforcement process is to apply to the Magistrates Court for an Investigation Summons against the debtor. This requires the debtor to attend the Magistrates Court and explain their financial circumstances and their ability to satisfy the judgment debt.
In light of those circumstances, the court generally will order repayment in reasonable instalments. If the debtor does not attend court, then more drastic measures can be taken such as applying for a Warrant of Arrest, whereupon the debtor will be brought before the court and a repayment order made.
If the debtor is a company then an application for an Examination Summons must be made against a director of the company to be examined as to the financial capability of a company to satisfy the judgment debt.
Once an Investigation Summons has taken place and the debtor fails or refuses to make payments in accordance with the Order of the Court then it may be appropriate to apply for a Warrant of Sale.
A Warrant of Sale allows an officer of the court, called a Court Bailiff to attend the debtor's address to seize their property and sell it to satisfy the debt. The property can be personal or real property, which are goods and chattels or land.
However if the debt is under $10,000.00 the creditor must apply to the court and explain why the judgments debt should be paid from the sale of the debtor’s property. Property that may be seized by the Court Bailiff is subject to the provisions of the Bankruptcy Act and Regulations.
Another option may be to apply to the court for an attachment of debts (known as a garnishee order). This is served on both the debtor and a third party, usually the debtor’s employer if the debtor is an individual. This order basically precludes the third party from dealing with the monies that relate to your proceedings until the court has heard them. There can be difficulties in securing orders of this type as bank accounts cannot be attached, nor are wages generally attachable unless the debtor consents.
Finally, the Court may be able to attach a charge to the property of a debtor. This means that once a charge is registered against a specific piece or class of property (goods, chattels or land), that piece or class of property can be sold and the charge holder paid in preference to other unsecured creditors. Alternatively, if the judgment debtor owes more than $5,000, a Bankruptcy Notice can be served.
If the debtor, wether an individual or a company does not have assets or the means to satisfy the judgment debt then it may become repetitious and expensive to have the debtor brought before the court in seeking to have the judgment debt satisfied.
As we’ve previously said, and many creditors have found out, “it is like a dog chasing its tail”.