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If you go to Court to defend yourself against a claim that you owe money and you lose, or if there is a Default Judgment made in your absence, there will be a Judgment Debt that you have to pay.
Usually, yes. If you don't pay, or can't pay, the person who wants to enforce the judgment can apply to the court to recover their money in another way. You can also apply to the court to be allowed to pay the money by instalments if you can't afford to pay the lump sum owed.
You can ask the magistrate at the time of judgment to order that you pay by instalments. You can also apply at any time after the judgment. If you apply after the judgment is ordered, there are forms you need to fill in and you will have to prove that your circumstances would not enable you to pay straight away. A Chamber Magistrate can help you with the forms you need to submit. You can also make a formal agreement with the person to whom you owe the money. This agreement needs to be entered into by both of you signing a form, which outlines the terms agreed to. This needs to be provided to the court and both parties should keep copies. You can see the Chamber Magistrate for assistance with this. See our Factsheet: What do I do about getting forms, and filing and serving documents?
Making an application to pay by instalments is often a good idea as an instalment agreement will prevent a creditor from imposing a garnishee on your wages or sending a sheriff or bailiff to take your possessions in order to pay the judgment debt (see below).
The person seeking to enforce the judgment debt can summons you to court so that they can question you about your financial situation. You will have to be served with an 'examination summons' which will set out what information you will need to present to the court. You might have to prove your income and assets or disclose other financial information about yourself in court. This is so the court can work out what would be the best way for you to pay the debt. You will then probably be ordered to pay in a certain way, often by instalments.
If you receive an examination summons you MUST attend the court on the day specified.
The other way a creditor can make you pay is by taking a regular amount from your wages or bank account. This is called a 'garnishee order' and it usually means that quite a lot of money is taken each time until the debt is paid off. The first you might know of a garnishee order on your wages or bank account is when the money is actually taken out. A garnishee order can mean great financial hardship for you. If you are having your wages reduced in this way and it is causing you hardship, you should apply immediately to the court for an instalment order. With an instalment order, the repayments can be smaller over a longer period and therefore be more manageable.
They can be. A bailiff or a sheriff can come to your house and ask you to pay the debt or have your goods taken and sold to cover the amount. Most bailiffs and sheriffs will give you time to negotiate and you should try to come to some agreement. However, be careful that you do not make an agreement you cannot keep. It is very stressful being threatened with the sale of your goods and you should try not to be scared into any unfair arrangements.
Only property that belongs to you. They cannot take something that belongs to another member of the household, anything rented or hired, anything that is not paid off or anything that has been used as security for a loan. If the bailiff or sheriff tries to take something that is not yours, you might need to show receipts to prove ownership. They also cannot take your basic living equipment such as pots, pans, blankets, beds and refrigerators or anything you, or another household member, uses to earn a living (with some exceptions). Most of the time, the bailiff or sheriff cannot take land owned by you, but if they have already sold your other property and the debt is more than $3000, they might be able to sell your land. Any money that remains after the goods are sold and the debt is paid off is returned to you.
No. They are not allowed to force their way into your house and you can refuse them entry, but you must do so politely. Assaulting or obstructing a bailiff or sheriff is an offence and you could be fined or gaoled. They can, however, enter an open or unlocked door without your permission. They are allowed to force their way into buildings on the property that are not physically connected to the house, for example, garages and sheds.
If the debt is $2000, (or presumably, more) the person who you owe can start proceedings to bankrupt you. There are many serious implications of being bankrupt. You can also go bankrupt voluntarily but you should seek legal, or financial, advice before deciding to do this.
Produced by Redfern Legal Centre.
This factsheet is no substitute for legal advice. If you have a problem
please seek legal advice from your local community legal centre
Last updated January 2006