Enforcing a Judgment in Tasmania

When a creditor gets judgment from a court against a debtor, the amount that the court orders the debtor to pay is called the judgment debt. This amount is immediately payable by the judgment debtor. If a judgment debtor cannot or does not pay the amount of the judgment debt to the creditor, the creditor can use court processes to enforce the judgment and recover the money from the debtor. This page deals with enforcing judgments in Tasmania.

Legislation

The laws governing enforcing a judgment in Tasmania are the Debtors Act , the Magistrates Court (Civil Division) Act  and the Magistrates Court Rules. Under these Acts, there are fees that apply for the issue and service of most enforcement actions.

Limitation period for enforcing judgments

A creditor can enforce a judgment any time within six years of the date of judgment. They may also be able to enforce the judgment after that period has elapsed with the permission of the court.

Judgment summons and oral examination

Enforcing a judgment in Tasmania can be commenced through Oral Examination or through a Judgment Summons. These processes are both commenced by filing and serving a summons on the judgment debtor to attend court where they will be asked questions about their finances, including what goods and assets they own, what income they receive and their expenses.

If a debtor does not obey a summons for an Oral Examination, a warrant may be issued for their arrest. After hearing an Oral Examination, the court can make an order – for example, an order that the debt be paid by instalments.

If a creditor issues a Judgment Summons and the debtor fails to appear, the magistrate can make an order in their absence. For example, an order may be made that the judgment debt must be paid off in instalments with a specified amount to be paid each week.  

If, after the hearing of a Judgment Summons, the court believes that the debtor has the means to pay the debt and has not done so, it may order the debtor to be imprisoned for up to six weeks.

Warrant for seizure and sale

When enforcing a judgment in Tasmania, a creditor can apply for the issue of a warrant for the seizure and sale of the judgment debtor’s property. This allows for the seizure of some of the debtor’s property to pay off the debt. However, there are some items that cannot be seized, including any personal clothing, bedding and tools of trade up to a value of $3,000.

Any property seized under a warrant can be sold by public auction or in a manner directed by the court. The bailiff can take from the proceeds of a sale any necessary expenses incurred in executing the warrant, including any fees for towing or storage and any auctioneer and valuer fees.

A warrant for seizure and sale expires after 12 months, but a further warrant may then be issued.

Order for payment by instalment

If an agreement is reached for payment of the judgment debt by instalments, the court can order that the debt be paid by instalments. The amount to be paid in each instalments will depend on the debtor’s financial circumstances.

Garnishee orders

A garnishee order is an order that binds a party that owes money to the debtor or is in possession of money belonging to the debtor such as the debtor’s employer or financial institution. The order directs the party to pay some or all of the debtor’s money directly to the creditor, as payment of the debt.

There are two kinds of garnishee orders, a one-off (or lump sum) order and a periodic payment or wages order. A one-off payment requires the third party to make a single payment to the creditor of money belonging to the debtor. A periodic order requires a party to make deductions from periodic payments made to the debtor and pay that money to the creditor reduction of the judgment debt. The amount to be deducted is set by the registrar and is generally 20% of the debtor’s wage or salary.

To garnishee the wages of a Tasmanian public servant, a certified copy of the judgment must be served on the relevant department, and deductions will be made at a rate set by the department.

Provisional garnishee orders

A provisional garnishee order is a garnishee order that is made as part of a default judgment.

Within 21 days of receiving a provisional garnishee order, the debtor may make an application to set aside the default judgment if they dispute the debt or the amount of the debt.

A debtor can also make an application to reduce the amount of the garnishee order because of their family circumstances or their financial situation.

Centrelink recipients

If a debtor receives Centrelink payments and this is their only income, they are judgment-proof. This means that a judgment cannot be enforced against them until their circumstances change.  This is because the law considers that a person on a very low income cannot be expected to give up their only income to pay a debt as their income is needed to cover their day-to-day necessities.

However, if a Centrelink recipient subsequently starts earning wages, receives inheritance or ceases to be judgement-proof for some other reason, the judgment may be enforced against them provided the limitation period has not expired.

Can you be imprisoned for a debt?

Under the Debtors Act 1870, a person can only be imprisoned for failing to pay a debt in Tasmania in very limited circumstances. These include:

• when there is a default by trustees or solicitors
• where a person tries to avoid paying a judgment debt by leaving Tasmania, or
• where they have had the money to pay the debt or an instalment order and have not done so.

If you require legal advice or representation in any legal matter, please contact Go To Court Lawyers.