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Can the Local Court Registrar accept an Instalment Order from a debtor where the amount offered is less than the contractural obligations?
But the amount accepted by the Court means the arrears on the loan will continue to grow, is there anything I can do?
We have had a number of questions on this topic, in this article we'll go through the process.
The short answer to this question is yes, they can.
When the Registrar responds to a debtor attending the Local Court, an examination is conducted. When determining if the debtors proposed Instalment Order is an acceptable amount, the Registrar is reviewing;
Note that at no stage does the local court ever refer to the Contractual Obligations (Loan Contract - contracted repayments) when determining an acceptable amount. The Court views the debt from a completely different perspective - that is the Judgment Debt.
Yes, there is something you can do. However you will need to think long & hard to determine if you actually want to......
You can lodge an objection to the Instalment Order with the Local Court. The Local Court will then set a hearing date which can be up to 3 months away. When the hearing does finally take place, a solicitor must be in attendance to act on your behalf.
Our experience in this process is that unless you have exceptional circumstances (eg Debtor misleading the Local Court), this is a costly and time consuming process with no guarantee of a positive outcome.