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Debt Collection News


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

Court Closures 2017-2018 Christmas Period

Saturday, December 30, 2017 - Posted by Michael McCulloch

As is the usual practice this time of year we have received notification that several Courts will not be opened or will have limited staff over the Christmas / New Year period.

As of 18/12 notification has been received from the following States and Territories:

New South Wales
A majority of Registries will be closed from Monday, 25 December 2017 and will re-open Monday, 8 January 2018.

Queensland
All Registries will be closed from Wednesday, 27 December 2017 and will re-open Monday, 8 January 2018.

Victoria
TBA

Australian Capital Territory
All Registries will close from 4.30pm on Friday, 22 December 2017 and will re-open Tuesday, 2 January 2018.

Northern Territory
TBA

South Australia
Magistrates' Court Registries permanently staff during the Christmas / New Year period except for gazetted public holidays.
Supreme and District Court Registries closed from Friday, 22 December 2017 and will re-open on Tuesday, 2 January 2018.

Tasmania
TBA

Western Australia
TBA

Please remember that our office will also be closed over the Christmas and New Year period with us returning for business on Wednesday, 3 January 2018.


Update to Court Charges for Enforcement of Debts

Friday, July 01, 2016 - Posted by Philip Harvey

Being the beginning of a new Financial year we have seen several Local and Magistrates' Court update their filing fees, Sheriff / Bailiff costs and the allowable Professional Costs.

You can find our latest pricing by visiting the resources page on our website.

Postponement of Enforcement Proceedings

Tuesday, August 25, 2015 - Posted by Michael McCulloch

We often come across examples where requests are made to our office for the issue of Default Notices. Having reviewed the request we then find that the same debtors have been issued with the same Notices several times over the course of their loan.

Effectively as a Creditor you are teaching the debtor to pay upon receipt of the Default Notice and not as their Contract stipulates. The debtor will often make contact, make arrangements to clear the arrears however fall into arrears again. The next month you will be issuing another Default Notice, the debtor will contact and make an arrangement and the cycle continues. As a Creditor how can you end this cycle and take control of the account?

Under Section 94 of the National Consumer Credit Protection Act 2009 the debtor can propose an application, verbally or in writing, to postpone action under a Section 88 or Section 90  (i.e. they make an arrangement to clear the arrears). The application must be made by the debtor prior to the s88 or s90 Notice expiring.

As the Creditor you must respond to the request made by the debtor within 21 days of the application and advise of the decision, either accepting or declining the application, the name of their relevant EDR scheme and the debtors rights under the scheme.

What happens though if you wish to accept the debtors proposal but don't want to get caught in the cycle of issuing another Default Notice?

As a Creditor you can issue a Section 95 Notice of Postponement under the Act.

This Notice indicates to the debtor the conditions of the postponement and advises the debtor that the Creditor is not required to give any further Default Notice under the NCCP Act. The Notice however only applies to the debtor that originally negotiated the postponement and does not apply to other debtors, mortgagors or guarantors under the Contract unless these parties have consented to the negotiated postponement.

You can find out more about this service by contacting us.


Legal Action to recover debts in the ACT

Wednesday, June 12, 2013 - Posted by Philip Harvey

This is an updated review of using the Legal system in the Australian Capital Territory to collect debts.

When collecting debts under $10,000, you must obtain Judgment through the ACT Civil & Administrative Tribunal (ACAT) where different rules apply that are more informal. Once you obtain Judgment in ACAT, you undertake enforcement action through the magistrates court.

It should be noted that enforcement action in the ACT to collect debt can be expensive. Careful consideration is required.

Included in this review is a workflow to assist in the understanding of the process.


Debt recovery legal obligations when commencing legal action

Wednesday, February 20, 2013 - Posted by Philip Harvey

When commencing legal action to collect a debt, you are bound by a number legal obligations. These are common sense that are generally followed as a matter of course by everyone. All jurisdictions in Australia have these obligations (on both Plaintiffs and Defendants), with Victoria being the most explicit and the best example to go through.

The legal obligations in Victoria are called Overarching Obligations. They are as follows;

  • Paramount duty - you have the paramount duty to the court to further the administration of justice.
  • Overarching obligation to act honestly - you must act honestly at all times in relation to your case.
  • Overarching obligation-requirement of proper basis - you must not make claim or response to a claim that is vexatious, frivolous, an abuse of process or does not have proper basis.
  • Overarching obligation to only take steps to resolve or determine the dispute - you must only take steps that will resolve your dispute or case. You must not cause undue delay.
  • Overarching obligation to cooperate in the conduct of civil proceeding - you must cooperate with the other parties.
  • Overarching obligation not to mislead or deceive - you must not engage in conduct which is misleading or deceptive, or is likely to be misleading or deceptive.
  • Overarching obligation to use reasonable endeavours to resolve dispute - you must try to resolve your dispute with the other parties. You must use appropriate dispute resolution processes.
  • Overarching obligation to narrow the issues in dispute - if you are unable to resolve your dispute completely with the other party, you must try and resolve as many issues as you can, to narrow the issues that are in dispute.
  • Overarching obligation to ensure costs are reasonable and proportionate - you must ensure that any legal costs incurred during the case are reasonable and proportionate to the case, having regard to the complexity of the case and the amount in dispute.
  • Overarching obligation to minimise delay - you must ensure that you act promptly and minimise delay at all times during your case.
  • Overarching obligation to disclose existence of documents - you must disclose the existence of any documents that you have which are critical to the resolution of the dispute. Once you are aware you have a critical document, you must disclose its existence to the other party at the earliest opportunity. (Note: if you are given documents you can only use them in connection with your case).


When commencing proceedings, you are agreeing to abide by these obligations. If you do not understand these obligations you should  contact us.


Using the Legal System to Collect Debts in Australian Capital Territory

Monday, August 01, 2011 - Posted by Philip Harvey

Originating Claim & Statement of Liquidated Claim 

After expiry of default notice the initiating action in the Magistrates’ Court is a Claim.

  • Can be served via post or in person
  • Can apply for Judgment 28 days after service

* Magistrates’ Court does not deal with matters under $10,000. Disputes less than $10,000 are fall within the jurisdiction of ACT Civil and Administrative Tribunal (ACAT).

* ACAT costs $123.00

* Costs for Original Claim and Statement of Claim between $764.00 to $1,334.00 depending on amount

This can be compared against the other states and territories here.

 
Judgment

  • This action formally registers the debt with the court and allows further collection action.
  • Judgment stands for 12 years.

*Obtaining Judgment costs between $500.00 to $1,350.00 depending on amount of Claim (undefended)

This can be compared against the other states and territories here.


Once Judgment granted then 4 choices of enforcement proceeding are possible.

Before enforcement of the Judgment the debtor must be served with a copy of the Judgment made against them. Further enforcement must not commence until 7 days after service has been affected on the debtor.


Enforcement Hearing Subpoena

  • This is used where you are unaware of Debtors Assets, Employment.
  • Documents are personally served on the debtor to attend court.
  • Hearing is conducted by the Registrar and debtor must provide details of income expenses and assets.
  • Registrar may make an Order for Instalments, Earnings Redirection or Seizure and Sale Order at this hearing.
  • If debtor doesn’t attend then you can apply for a Warrant.

This can be compared against the other states and territories here.

*Cost is $139.00 to $562.00 for the Court Application + preparation (attendance charges additional) (undefended).

Redirection Orders

  • Three types – Earnings Redirection, Debt Redirection and Regular Redirection
  • Must know the financial institution details or employers details
  • documents are served on the financial institution or employer
  • A copy of the Order must be served on the debtor within 5 days of service on the financial institution or employer
  • Financial institution, employer or debtor may apply to rescind or vary the Order on the grounds of financial hardship

Recommend an Enforcement Hearing Subpoena prior to the Redirection Order to obtain current financial details

* Cost is $91.00 to $249.00 depending on amount of Claim for the Court Application + preparation (attendance charges additional) (undefended).

This can be compared against the other states and territories here.

Seizure and Sale Order

  • Sheriff attends property of debtor to demand payment and tag any assets of value.
  • If payment cannot be made goods to the value of the debt are seized and sold.

*Cost is $345.00 to $460.00 depending on amount of Claim (undefended)

This can be compared against the other states and territories here


Bankruptcy

  • Judgment must be obtained then a bankruptcy notice served.
  • Once Bankruptcy notice has expired then Bankruptcy can be applied.
  • Once bankruptcy obtained all debts owed by the debtor are captured under the Bankruptcy.

*Cost is a minimum of $2500.00 if matter is undefended (after Judgment costs)

 

* Important Note: All costs are estimates as at 16/08/2011 and do not include costs of counsel and preparation for hearing.


Debt Collection & Centrelink Recipients

Monday, November 01, 2010 - Posted by Philip Harvey

The quick answer is not without the debtors consent.

The law states 

Social Security Administration Act 1991 (Cth)

Section 60(1) of the Social Security Administration Act 1991 (Cth) (“the Commonwealth Act”) provides that:


“A social security payment is absolutely inalienable, whether by way of, or in consequence of, sale, assignment, charge, execution, bankruptcy or otherwise.”


Section 60(2) of the Commonwealth Act provides for a number of exceptions which apply to the collection of certain Commonwealth debts and therefore are not relevant to any consideration of a debt owing to an Financial Services Provider by a Centrelink recipient.


Legal action against a centrelink recipient ?


Legal action is certainly possible against a debtor receiving Centrelink and Judgment will be entered against them.

However action to recover is limited. As the debtor is not employed a garnishee against wages is not an option.

A bank garnishee is possible however only funds in excess of the Centrelink payment that are held in the account for a period are  claimable .  As most Centrelink receivers do not hold large balances in their accounts this is generally not successful.

A writ to take goods and property can be successful if debtor has goods of value to take.


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.


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 


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