Successfully suing somebody and obtaining an order that they pay you is all very well and good – but a judgement ultimately is nothing more than a piece of paper. Turning that piece of paper into actual money is the aim. So, how do you go about doing this?
Enforcing the judgment
There are four common forms of enforcing a judgment, which include Attachment of Debt, Attachment of Earnings, Summons for Oral Examination and a Warrant to Seize Property. Briefly, each of those steps involves the following:
- Attachment of Debt – this is where the judgement debtor itself has a debtor who owes it money. In those circumstances, you can obtain an Order that that debtor instead pay the money to you to satisfy the judgement.
- Attachment of Earnings Order – this is used where the judgement debtor earns wages and you effectively obtain an Order to garnish those wages to satisfy the judgement debt. This is only useful in relation to individual wage earners (i.e. not companies) and we suspect that it is unlikely that you would be dealing with such judgement debtors.
- Summons for Oral Examination – this is a useful procedure to use where you are unsure what assets the judgement debtor might have. Under this procedure, the debtor (or a director of the debtor in the case of a company) is forced to attend Court and answer questions on oath concerning their assets, liabilities, earnings and expenses and on the basis of this information you may then be able to decide which of the other enforcement options it would be appropriate to undertake in respect of the particular judgement debtor.
- Warrant to Seize Property – this is a warrant which is issued to the Sheriff, who then attends at the premises of the judgement debtor and seizes property of the debtor with a view to selling it so as to satisfy your judgement debt. The effectiveness of issuing a warrant very much depends on the attitude of the particular Sheriff who executes the warrant. In our experience, some of the Sheriffs are quite helpful to debtors and do not go out of their way to seize the debtor’s property for your benefit.
Each of these enforcement methods have Court fees in the order of $100.00 or so. In addition, there will be legal fees incurred in preparing and issuing the necessary paperwork.
Bankruptcy and Winding up – the “Nuclear” options
Although not strictly speaking methods of enforcement, the other two common ways of seeking to have a debtor pay after you have a judgement against them are the serving of a Statutory Demand (in the case of debtors that are companies) or the issuing and serving of a Bankruptcy Notice (against debtors who are individuals).
The reason we have dubbed these procedures the “nuclear” options is that they can have such dire consequences for debtors – bankruptcy in the case of individuals, and winding up and deregistration in the case of companies. It is the gravity of those consequences that often makes these methods more effective at extracting payment from debtors than the 4 enforcement options listed in the section above.
We have summarised how these procedures basically operate below.