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Released every month our debt collection blog contains news, stories and tips to keep you informed.

Repairable Write-Offs can no longer be re-registered

Thursday, July 01, 2010 - Posted by Philip Harvey

The NSW government has is bringing in legislation that will ban the re-registration of all repairable written off vehicles to clamp down on car rebirthing.

This will see the value of any car you repossess that has been a write off fall dramatically. The cost of the repossession & selling costs will exceed the price obtained for the car, as the only interested parties will be parties seeking spare parts.

These changes are to take effect from August 2010.

The announcement / media release from the NSW made by the minister for Transport David Campbell is below;

BAN ON ‘REPAIRABLE WRITE-OFFS’ TO HIT CAR RE-BIRTHING RACKETS Thursday, 8 April 2010 

The NSW Government will introduce legislation to ban the re-registration of all ‘repairable written-off’ vehicles to clamp down on car rebirthing, Minister for Transport and Roads David Campbell announced today.

Mr Campbell said the legislation will mean that write-offs will no longer be able to be sold at auctions, where the vehicles can then be re-birthed and on-sold to unsuspecting consumers.“ There is a black market for purchasing written-off vehicles at auctions, then using stolen parts to rebirth and register the car, to be sold for a tidy profit,” Mr Campbell said.

 

“This isn’t being done by licensed repairers - in most instances it’s not financially viable for genuine repairers to repair these cars using legitimate parts. “In many cases, it’s being done by unscrupulous operators in backyards and workshops using stolen parts, who then sell the vehicles to unwary motorists.

“Some consumers are being taken for a ride - motorists might be driving around in what’s effectively a stolen vehicle. 

“More importantly, many of these vehicles have had dodgy repairs which can mask major structural damage. It’s extremely unsafe.

“Car re-birthing is a significant problem which has been known to have links to organised crime syndicates.

“Today’s announcement will put a massive dent in these illegal operations.

“It’s estimated that as many as six out of ten of the 20,537 repairable written-off vehicles presented for re-registration in 2009 posed serious questions about the origin of the parts used to repair them.

“Around 19,000 vehicles were stolen in NSW in the 2008-09 financial year – of these, around 5,700 have not been recovered.

“Today’s announcement means any car which is written off will not be able to be reregistered even if it can be repaired.”

Mr Campbell said the NSW Government made the decision to ban repairable write-offs after a discussion paper was released for consultation in August last year.

“What we found was that consumers – as well as legitimate car dealers and repairers – wanted better protections in place,” he said.

“NSW is the first state to introduce this ban on repairable write-offs, and we would encourage other states to follow our lead and implement similar laws.

“There will be very limited exemptions to the new laws – for some vehicles written off because of hail damage, and for some classic antique cars.

“We will also strengthen written-off vehicle notification requirements – for example, vehicles currently being sent to a scrap yard for crushing are not required to be registered on the Written-off Vehicle Register (WOVR) and this presents an additional opportunity for rebirthing.”

Mr Campbell said the new laws are on top of the RTA’s Vehicle History Check service launched last year.

“The RTA’s Vehicle History Check service allows potential buyers to check whether a used car has ever been written-off anywhere in Australia,” he said.

“The service also provides customers with details of a car’s history including the number of previous owners, when it was first registered in NSW and odometer readings.

“All you need is the car’s registration plate details, vehicle type and the last four digits of the VIN/chassis number,

“It’s a simple check you can do on the RTA website for under $20.”

The new laws will be implemented following stringent legislative change and will take effect in August this year.  

Facebook and Debt Collection

Tuesday, June 01, 2010 - Posted by Philip Harvey

There's been some recent media coverage about ANZ & the Facebook Dont's. It's a timely reminder, especially after Facebook changed everyones privacy settings so they could be viewed by all (including search engines!).

Collections staff in Melbourne assigned to an unsecured debt portfolio created a fake identity profile on Facebook to obtain information on customers in arrears who had changed address without informing the bank. The fake identity - Max Bourke - never identified the bank or any relationship with the bank. This identity was used to send friend requests to debtors who would unwittingly accept these requests allowing access to their Private Information on Facebook.

ANZ have advised that this activity was not approved or sanctioned by the ANZ & is completely unacceptable.

Facebook has become a powerful tool in the corporate world, from Recruitment Agencies performing background checks on Facebook pages & advertising new products. This serves as a good example / reminder of what not to do with Facebook.

Writs in Debt Collection

Tuesday, June 01, 2010 - Posted by Philip Harvey

New South Wales

Prerequisites 

Judgment 

Execution Method

Execution by the Sheriff

 Valid for

 12 Months

 Official Name

 Writ for Levy of Property

Notes for New South Wales;
Sheriff cannot seize:

  • Personal clothing & bedding
  • Tools of trade

Victoria

Prerequisites 

Judgment

Execution Method

Execution by Sheriff

 Valid for

12 months

 Official Name

Warrant to Seize Property

Notes for Victoria;
Sheriff cannot seize:

  • Personal clothing & bedding
  • Tools of trade

Queensland

Prerequisites 

Judgment 

Execution Method

Execution by Bailiff

 Valid for

12 months

 Official Name

 Warrant of Seizure & Sale

Notes for Queensland;

Bailiff cannot seize:

Personal clothing,  bedding & Tools of trade

South Australia

 

Prerequisites 

Judgment

Execution Method

 Execution by Sheriff

 Valid for

 12 Months

 Official Name

 Warrant of Sale

Notes for South Australia;

Sheriff cannot seize:

Personal clothing, bedding & Tools of trade
Warrants of Sale are executed against personal property prior to proceeding against real property

Tasmania

Prerequisites 

Judgment 

Execution Method

Execution by Bailiff

 Valid for

12 months

 Official Name

Warrant to Seize & Sell Property

Notes for Tasmania:
Any personal property to be sold before  real property 
Bailiff cannot seize:Personal clothing & bedding, Tools of trade

Western Australia

Prerequisites 

Judgment / Means Inquiry

Execution Method

Execution by Bailiff

 Valid for

12 months

 Official Name

Property (Seizure and Sale) Order

Notes for Western Australia:
A Judgment Debtor’s saleable interest in any real estate property must not be sold unless the Bailiff is satisfied that the sale of personal property will not be sufficient to satisfy the Judgment.

Bailiff cannot seize:

  • Wearing apparel of the judgment debtor to the value of $1,250.
  • Wearing apparel of a dependant of the Judgment Debtor to the value of $1,250.
  • Family diaries, photographs and portraits.
  • Medical and dental aids and equipment.
  • Kitchen, dining furniture and implements up to a value of $1,250.
  • Bedroom furniture and bedding up to a value of $500.
  • Bedroom furniture and bedding of the Judgment Debtor’s dependents up to a value of $200.
  • Laundry equipment up to a value of $200.
  • Electrical goods used for family entertainment to a value of $300.
  • Ordinary tools of trade, plant and equipment,
  • professional instruments and reference books to the value of $2,500, which are used by the Judgment Debtor to earn income by personal exertion.
  • Refer here for a case study on a successful Writ

Northern Territory

Prerequisites 

Judgment 

Execution Method

Execution by Bailiff

 Valid for

 12 months

 Official Name

Warrant of Seizure & Sale

Notes for Northern Territory;
Sheriff cannot seize:
Personal clothing, bedding & Tools of trade

Australian Capital Territory

Prerequisites 

 Judgment

Execution Method

 Execution by the Sheriff

 Valid for

 12 Months

 Official Name

Seizure and Sale Order 

Notes for ACT;
Sheriff cannot seize:
Personal clothing, bedding & 
Tools of trade


Garnishees compared across different States and Territories

Saturday, May 01, 2010 - Posted by Philip Harvey

A Garnishee is an enforcement action that either serves a Local Court order on an employee to redirect earnings over a certain threshold / agreed amount or is an order to a financial institution to remit funds held on account for the debtor. If an Employer / financial institution fails to action the Garnishee Order, enforcement action may be taken through the courts to gain payment.

New South Wales

Prerequisites  Judgment
Service Method Personal Service on the Employer / Financial Institution. Though some employers specify what service methods they will accept & act on
Valid for  Remains in force until balance of the Judgment Debt is paid or employment terminated
Official Name  Garnishee Order

Any amount paid under one or more garnishee orders must not, in total, reduce the net weekly amount of any wage or salary received by the judgment debtor to less than the standard workers compensation weekly benefit (section 122 Civil Procedure Act 2005). This amount is adjustable - refer to  http://www.workcover.nsw.gov.au/WorkersCompensation/WorkplaceInjuries/Benefits/weekly.htm

   

Victoria

Prerequisites 

Judgment / Hearing 

Service Method

Personal Service on the Debtor 14 days prior to the hearing, once a hearing has been completed, service of the Garnishee on the Debtor & employer.

Valid for

Remains in force until balance of the Judgment Debt is paid or employment terminated 

Official Name

Attachment of Earnings Order

Note for Vic - The maximum amount that can be taken from wages is 20%. The Registrar will make a decision, on all the information available, as to the appropriate amount to be garnished from the Debtor’s wage.

Queensland

Prerequisites 

 Judgment

 Enforcement Hearing Summons
Service Method  Personal service of the Redirection of Earnings Order on the employer and Defendant
Valid for   Remains in force until balance of the Judgment Debt is paid or employment terminated
Official Name  Redirection of Earnings

Notes for QLD;
Deductions to commence within 7 days of service of the Attachment of Earnings Order
Court will determine amount to be deducted under the Redirection of Earnings (Protected Earnings rate)

South Australia

Prerequisites 

Investigation / Examination Hearing 

Service Method

 Where the Court makes an order for attachment in the absence of either a garnishee or a judgment debtor: 
  (a) the judgment creditor must forthwith serve a garnishee, who was not present, with the order of attachment;
  (b) the Court must adjourn the hearing to a date, time and place fixed by the Court;
  and(c) the judgment creditor must serve notice of the adjourned hearing and the application on a garnishee or a    judgment debtor who was not present when the order was made at least 4 clear days before the adjourned date.  

  On proof of service of any document required to be served, the Court may proceed in the absence of a garnishee or  a judgment debtor.

  An order for attachment, which is confirmed or varied at an adjourned hearing in the absence of a garnishee, must  be served forthwith by the judgment creditor on the garnishee.

Valid for

 Remains in force until balance of the Judgment Debt is paid or employment terminated

Official Name

 Order for Attachment / Garnishee Order

Note for SA;
Where the employer does not comply with the garnishee order, you can apply to the court to have Judgment awarded against the employer.



Tasmania

Prerequisites 

 Service of Provisional Order

Service Method

Pre-paid post addressed to the address of the person or Personal Service. Provisional Order must be served on  both  the Garnishee (employer) and the Defendant. If after 21 days of service of the Provisional Order the debt is not disputed Final Orders must be served on both the Garnishee (employer) and the Defendant

Valid for 

Remains in force until balance of the Judgment Debt is paid or employment terminated

Official Name

 Garnishee

Western Australia

Prerequisites 

Judgment

Means Inquiry 

Service Method

 Personal Service / Service by pre-paid post to the Garnishee of the Earnings Appropriation Order

 Valid for

 Until balance of the Judgment Debt is paid or employment terminated

 Official Name

 Earnings Appropriation Order

WA Note:

Mean Inquiry must be conducted prior to making an application for Earnings Appropriation Order
Judgment Debtor must be in arrears at least two (2) payments under an Instalment Order made at a Means Inquiry
An order cannot be made against a Judgment Debtor if another earnings appropriation order is in effect.


Australian Capital Territory

Prerequisites 

Judgment

Enforcement Hearing
Service Method  Personal Service / Service by pre-paid post to the Garnishee of the Earnings Appropriation Order
Valid for Until balance of the Judgment Debt is paid or employment terminated
Official Name  Earnings Appropriation Order
ACT Notes:
Enforcement Hearing must be conducted prior to applying for Earnings Redirection Order unless the Plaintiff can supply to the Court a Financial Statement of the Defendants current income and liabilities
Court will determine amount to be deducted under the Redirection of Earnings (Protected Earnings rate)

Northern Territory

Prerequisites  Personal Service on the Defendant of the Attachment of Earnings Summons 14 days prior to the hearing. Defendant must within 7 days of the hearing provide the Court with declaration of Financial Circumstances. Should the Defendant fail to appear the Registrar may make Orders in their absence if the Plaintiff can provide evidence of the Defendants income / liabilities for the Orders to be made.
Service Method Personal Service on the Defendant and Employer of the Attachment of Earnings Summons
Valid for  Remains in force until balance of the Judgment Debt is paid or employment terminated
Official Name  Attachment of Earnings (attaches to a Wage or Salary)

 Garnishee Order (attaches to debt)

Note for NT - The Registrar will decide the amount to be deducted from the Defendants earnings.


Redirection of Rent for Mortgages

Thursday, April 01, 2010 - Posted by Michael McCulloch

In the Real Property Act, there is a provision for the redirection of rent (for situations where the property is being rented out). At the expiry of a Mortgage Default Notice you can make an application to the party managing the property to have the rent redirected directly to you (the Mortgagee). 


Where rent is successfully diverted, the mortgagee is subject to all the rules associated with being a Landlord eg ensuring premises are in a fit state and will have to repair any damages (hot water service, plumbing, electricity, roof leaks, over grown gardens etc). Depending on the condition of the property it may be in your best interests to not have the rent redirected.


Where your application to have the rent redirected is rejected, you will need to apply for possession orders through the Supreme Court. Unfortunately there is no faster / easier way to enforce this provision.

Changes to the NSW Courts - Introduction of True Electronic Lodgement

Thursday, April 01, 2010 - Posted by Michael McCulloch

Instant Lodgement: Documents lodged in front of your eyes

Fast Processing: Documents processed as quickly as 2 hours by the court! (average approx 24 hours)

Online: No more need to attend the court, saving you & your team hours!

Electronic Tracking: Track the progress of your matter through the JusticeLink portal

If you need to enforce your debts quickly and effectively, you need JusticeLink eServices.

Don't have the time or money to develop the required systems?

If you need electronic lodgement of your court documents but don't have the time or money to develop the required systems, contact LCollect on the above number, or read here for information on how LCollect can help you.


From the 3rd of May 2010 the NSW Court system will introduce its new truly electronic system called JusticeLink. For all new proceedings in the Local Court, LCollect will be able to lodge SLC's, Judgments and Writs Electronically with a 48 hour turn around time. This will significantly reduce processing times for these items. Other Court Actions such as Garnishees and Exams will be released later in 2010 (no definitive time frame has been received).

LCollect has been at the forefront of testing these new eServices with the Justice Link eServices team.

There are a number of transitional issues that are likely to have an impact on processing times in the Local Court system. These include;

There are a large number (the majority) of providers who are not ready for eServices and will not be able to lodge online. Once the old system has been abandoned, these providers will have to lodge there documents manually (which means printing out every SLC, Judgment etc and lodging it in person with the Local Court). Any person leaving 5 documents or more per day will have there documents processed in a batch at a later point by the registry. 

New plaint numbers for all matters (new and existing matters will the local court). This means that to continue enforcement proceedings we will need to obtain a new Plaint Number from the Local Court (previously we had this on file). We have been advised that the Court will not advise anyone over the phone or email of new Plaint Numbers, and we will have to attend the Local Registry in person to obtain the new Plaint number to continue enforcement action. 

Given the above two points, we are envisaging processing times for non-elodgement items will increase significantly across all Local Courts, with the new system putting more strain on the Local Courts at the Launch of this new system. Once more providers switch to the new system and more electronic lodgment actions are made available, waiting times will reduce significantly.


Examinations Compared Across Different States and Territories

Monday, March 01, 2010 - Posted by Philip Harvey

Examinations are an enforcement action that provide you with further information about the debtors financial position. The debtor typically attends the local court and submits at Court Form detailing their financial position, including details of any assets, employment information, Centrelink benefits, Spouse income etc providing supporting documentation (note that the supporting documentation is not always provided). Typically further enforcement action can then be taken against the debtors known financial position where the circumstances warrant.

Note on States / Territories that allow for service via Post; We strongly advise personal service as do our solicitors. If you serve via post and the debtor does not turn up you will incur solicitor costs for attendance at the exam and a strong possibility that if you apply for a warrant it being rejected and your costs for the exam being rejected without proof that the debtor has received the exam.

New South Wales

Prerequisites   Judgment & 28 days after an Examination Noticed is Posted without being completed / returned
Service Method  Personal Service
Time Allowed for Service   Exam Notice must be served 14 days before the Exam Hearing has been scheduled by the local court.
 Official Name  Examination Order

Victoria

 

Prerequisites   Judgment
Service Method  Personal Service
Time Allowed for Service   7 days prior to the scheduled Examination as set by the local court
 Official Name  Summons for Oral Examination

Queensland

Prerequisites   Judgment
Service Method  Personal Service
Time Allowed for  Service   Any other enforcement hearing summons must be served on the person to whom it is directed personally or   by prepaid ordinary post at least 14 days before the day set for the enforcement hearing as set by the Magistrates Court .
 Official Name  Enforcement Hearing

South Australia

Prerequisites   Judgment
Service Method  Pre-paid post addressed to the address of the person or Personal Service
Time Allowed for Service   4 clear days before the date fixed for the Examination Hearing.
 Official Name  Examination Hearing

Tasmania

Prerequisites   Judgment
Service Method Personal
Time Allowed for Service  4 days before the Hearing
 Official Name Judgment Summons (commonly referred to as Oral Examinations)

Western Australia


Prerequisites   Judgment
Service Method  Personal or Postal
Time Allowed for Service   5 Days before the hearing
 Official Name  Means Inquiry

Australian Capital Territory


Prerequisites   Judgment
Service Method  Personal Service
Time Allowed for Service   14 days before the Enforcement Hearing has been scheduled by the magistrates court
 Official Name  Enforcement Hearing

Northern Territory

Prerequisites   Judgment
Service Method  Personal Service
Time Allowed for Service   14 days before the Exam Hearing has been scheduled by the magistrates court
 Official Name  Examination Summons
Note for NT;
Debtor has 7 days from the date of the Examination Summons to 
(a) complete and sign the declaration of financial circumstances; 
(b) return the original to the Court; and 
(c) send a copy to the judgment creditor 

Payment Arrangements and Deeds in Debt Collection

Monday, March 01, 2010 - Posted by Philip Harvey

An interesting Supreme Court case where a Creditor was able to successfully use a deed to enforce a debt.

Mirzikinian v Tom & Bill Waterhouse Pty Ltd [2009] NSWCA 296 (8 October 2009). The full case can be read here.

Background Information to the Case

Mr Waterhouse as a licensed bookmaker accepted a number of bets from Mirzikinian on Credit. These bets run up to $250,000 over a one and a half month period.

At the conclusion of this betting period, negotiations took place between the parties to settle the debt. During this negotiating period, Mirzikinian did not dispute that he owed the money. Mirzikinian was seeking an extension of time to pay the debts back.

5 - 6 months later on 27th March 2007 the debt was still outstanding with no payments being made. At this time discussions took place;

Louise said: "As you know I have discussed your situation with Bill and he said he wouldn't consider any proposal for repayment until he has something in writing, so we have prepared a document for you to sign so we can show him".

Mirzikinian: "Ok that sounds fair enough".

Robert said: "He likes doing things the proper way.”

At the conclusion of this - an Unsigned Deed was handed to Mirzikinian - which was signed by Mirzikinian and handed back to Robert & Louise. The deed allowed for full payment by 1st of September 2007 and applied for interest penalties that were backdated after this date if payment was not made & charges for all his property in favour of Bill & Tom Waterhouse Pty Ltd.

The deed that was signed by Mirzikinian was not immediately witnessed or signed by other party (Robert or Louise). Rather Louise advised - “We will show this to Bill and let you know if it is acceptable to him and we will get back to you"

On 20th August 2007 (5 months after receiving the signed deed) Louise and Mirzikinian had a further conversation where Mirzikinian advised he had not heard back about the proposal (Deed). Louise response was; "Sorry I thought it was obvious that’s why we have left you alone for so long".

The debt remained unpaid as at the 1st of September 2007 (the date contained in the Deed) and Tom & Bill Waterhouse Pty Ltd  then lodged a Statement of Claim for the $250,000.

Mirzikinian and his lawyers attempted to argue that the Deed was not valid on the basis of Louise's comments about showing Bill & getting back to him. They argued that the Deed was not effective as Mirzikinian had not been informed that Bill had signed it. 

Key Decisions:
  • The Deed was legally binding on Mirzikinian as soon as he signed it
  • The $250,000 paid by the appellant into Court as security for the judgment debt be paid to the respondent
  • Entitlement to interest on $250,000 to be decided in the District Court

New Zealand Debt Collector Jailed

Monday, February 01, 2010 - Posted by Michael McCulloch

A 10 month prison sentence was handed down for illegal attempts to recover $50,000.

Stephen Beston owned a car importing company and used and agent, Chris Jellie to source & import vehicles from Japan. In May 2006 while a shipment was on its way from Japan, Stephen Beston placed his car importing company into Voluntary Liquidation. This meant that the costs of the shipment had to be met by Chris Jellie, the importing agent.

The importing agent, Chris Jellie in May 2007 engaged a New Zealand debt collection firm owned by Andrew Sisson (who was described as a "Hells Angel Member"). Andrew Sisson then engaged Peter Cleven (paying him $5,000) to assist in the debt collection process.

Cleven then visited Beston and showed him some photographs - to which the nature of were ultimately disputed - however Beston claimed they showed dead mutilated animals, whilst Cleven claimed they were alive. Five days later Cleven visited Beston's daughter and left a note in her letterbox that read "Tell your Dad not to be an old goat. It's not a dog's life. It's not about bondage. It's about discipline for business and family integrity".

Cleven, initially charged with blackmail, pleaded guilty to criminal harassment of Beston & his daughter. The judge rejected an application for home detention noting "any right thinking person would take the view that threatening someone and his family implicitly with violence was completely unacceptable". A 10 month prison sentence was handed down.

Source: www.stuff.co.nz

Default Judgment Compared Across the different States and Territories

Monday, February 01, 2010 - Posted by Michael McCulloch

Default Judgment across the various States and Territories is almost identical. The only difference is the amount of time you must wait after service of the Statement of Claim before making the application for Default Judgment.

Obtaining Default Judgment does the following;

  • Formalises the debt being owed by the relevant State or Territory;
  • The Court will send notification to the Credit Reporting Agency to list Judgment against the debtors file; and
  • Changes the way in which interest is calculated.

The interest calculation is changed to be that of the relevant Local Court. These are Simple Interest Rate calculations, which only calculate interest on the Judgment Debt (ie it does not compound). Any payments that are made must first be applied against the Judgment Debt, thereby reducing the future amount of interest that is allowable.


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