A Court order or judgment can be obtained against individuals, corporations or other legal entities through a number of avenues, such as defended legal proceedings. During such proceedings, the court may make certain orders against you, for example:
- ordering you to do something,
- ordering you to cease doing something, or
- ordering you to pay money.
Orders, usually for the payment of money, can be made 'by default', meaning that you have failed to respond to or defend Court proceedings within a specified timeframe.
Judgment for the payment of money
What happens now?
The 'judgment creditor' is entitled to enforce a judgment against you or your company, being the 'judgment debtor', to compel payment in a number of ways. They are not obliged to enforce the judgment immediately or at all. However, in most cases once a judgment for payment is made, a judgment creditor will try to enforce it promptly.
Additionally, judgments may be recorded on you or your company's credit profile, which in turn may affect your ability to obtain credit in the future.
What is enforcement?
Some of the most common enforcement options include:
- Being summoned to Court to give evidence as to the judgment creditor's financial position,
- Having part of your wage ‘attached’ (redirected to the judgment creditor by your employer),
- Having monies held with a bank or owed to you by a third party 'garnished' (redirected to the judgment creditor by the bank or third party, or redirected to the judgment creditor,
- Issue of a Bankruptcy Notice (if the judgment is against you personally) demanding payment within 21 days. If payment is not made, proceedings can be commenced to bankrupt,
- Issue of a Creditor's Statutory Demand (for corporate judgment debtors) demanding payment within 21 days. If payment is not made, proceedings can be commenced to wind up your company, and
- Sending the Sheriff to seize property from your home or business.
What can I do?
It is generally never too late to negotiate with the judgment creditor to try to come to a mutually satisfactory solution, which can involve the judgment being set aside. Failing which, there are limited ways in which enforcement proceedings can be opposed. For example, judgments cannot be enforced indefinitely and are subject to time limits. There may also be circumstances that warrant an application to the Court to have the underlying judgment set aside, which would halt any enforcement action currently on foot.
Another method is to apply for the judgment to be paid by instalments. Whilst the application is on foot, most enforcement actions are suspended and should the instalment order be granted, this will remain the case.
Ultimately, as long as the judgment is enforceable, the judgment debtor will be at risk of enforcement action being taken against them.
If you believe you may have a judgment against you, see here for the latest judgments issued by the Federal Court of Australia.
If you have a court order or judgment against you, you should seek legal advice as soon as possible. As Accredited Specialists in Commercial Litigation, we can help you to understand the nature of any enforcement proceedings, the effect such action will have on you or your company, and advise you on your options, both legal and practical.
The information contained in this article is intended to be of a general nature only and should not be relied upon as legal advice. Any legal matters should be discussed specifically with one of our lawyers.
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For further information contact
Simon is a Senior Associate of Sharrock Pitman Legal.
He is an Accredited Commercial Litigation Specialist (accredited by the Law Institute of Victoria) and deals with Litigation, Mediation of Disputes, and Law for Charities & Not for Profits. For further information, contact Simon Matters on his direct line (03) 8561 3324.