Enforcing A Judgment (NT)
When a creditor successfully makes a small claim through a Northern Territory tribunal or court, the debtor is legally obligated to comply and pay the debt. If the debtor does not pay, there are ways of enforcing the judgment. This article explains the process of enforcing a judgment in the Northern Territory.
In the Northern Territory, debt collection is governed by several laws, including the Small Claims Act 2016, the Northern Territory Civil and Administrative Tribunal Act 2014 and the Local Court Act 2015. Under this legislation, a creditor in the Northern Territory has twelve years from the date of judgment to enforce the judgment. After this time, a creditor can only recover monies with the court’s permission.
In the Northern Territory, a debtor cannot be fined, arrested or imprisoned for failing to discharge a debt. However, a creditor can apply to enforce a judgment through an:
• Instalment order;
• Examination summons;
• Garnishing order; or
• Warrant of seizure and sale against the debtor’s goods.
The debtor can delay an enforcement action for 21 days by filing a Declaration of Intent to petition for bankruptcy.
In some instances, the costs of enforcing a judgment in the Northern Territory can be added to the total debt. For instance, the creditor can recoup some of the cost of a bailiff fee. As some types of enforcement action require payment of fees, this can be added to the judgment debt together with accrued interest. However, a creditor must weigh the benefit of enforcing a judgment, as the defendant may never be able to pay the debt, and the monies will remain unpaid.
Enforcing a judgment through an Instalment Order
When a debtor cannot pay a debt immediately, the parties can agree to a payment plan. In this way, a debt is paid in small instalments over a period of time. If the parties agree to payment terms, they can apply to the court for a formal order within seven days of signing an instalment agreement. The court can refuse an application if the debtor proposes repayment terms that are too minimal given their income and outgoings and/or the debtor provides insufficient information about their finances.
Even if the debtor does not cooperate, the creditor can apply to the court for an instalment order. In that circumstance, the debtor needs to provide evidence of their income, assets and expenses to prove that they are not reasonably able to repay the debt immediately. A debtor who avoids examination of their finances can be arrested by a private bailiff and forced to attend court on a warrant of arrest on disobedience to summons.
Additionally, if a creditor believes that the debtor’s financial circumstances have changed, they can apply for a variation of a previous instalment order.
Enforcing a Judgment through Seizure of Goods
A creditor cannot seize a debtor’s property without a court order, except when there is a contract that allows for the repossession of secured property. However, once the court grants a creditor a warrant of seizure and sale, the creditor can request that a bailiff confiscate and sell the debtor’s goods to discharge the debt (as well as costs and interest incurred by the creditor). A warrant to seize property remains in force for a year, during which the creditor can apply for the bailiff to make another attempt to seize goods.
When a warrant to seize property is enforced, the bailiff attends the debtor’s home to explain the enforcement. The bailiff can only take the debtor’s personal property that they fully own, such as money, electricals, furniture and vehicles. A bailiff cannot remove items that belong to someone else, jointly owned purchases, or rented assets. In addition, the debtor can hold on to items that are essential for their living and work, such as clothing and tools of their trade. The debtor can retrieve seized goods from the bailiff by paying the outstanding debt and the cost of seizure, advertising and the arrangement of sale.
Enforcing a judgment through attachment of Earnings Order
When the debtor has employment, the creditor can apply for an attachment of earnings order. Under this arrangement, the employer must take a set amount of money from the debtor’s wage until the debt is discharged or the court makes a further order. The court decides an appropriate amount, leaving the debtor enough funds for living expenses (called the “protected earnings rate”).
Enforcing a Judgment through a Garnishee Order
Sometimes a debtor is unable to pay because they are themselves owed money by someone else. In that case, the creditor can apply to the Registrar of the court for a garnishee order. This means that the person who is in debt to the debtor/garnishee pays the money directly to the creditor.
Please get in touch with the Go To Court team on 1300 636 846 if you need advice on enforcing or defending a judgment in the Northern Territory. Our solicitors can provide assistance or representation to enforce or defend a judgment involving an instalment order, seizure of goods, attachment of earnings order or garnishee order.