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If a creditor gets judgment against a debtor, the amount which the court ordered the debtor to pay, the ‘judgment debt’, is payable to the creditor immediately. Where the debtor cannot or does not pay the amount to the creditor straight away the creditor can use the court processes described in this section to ‘enforce the judgment’ that is, recover the money from the debtor.

A person cannot be imprisoned for debt in Tasmania except in certain circumstances, such as:

  • default by trustees, or solicitors;
  • where that person is trying to avoid a judgment debt by leaving Tasmania; or
  • has had since judgment the means to pay the judgment debt or any installment thereof ordered to be paid, and has refused to neglected to do so (ss3 and 5Debtors Act 1870 (Tas)).

However, imprisonment is extremely rare because it will almost always be counter-productive.

Whenever the creditor is paid any or all of the judgment debt, the debtor should obtain a receipt. This applies to payment before and after judgment. A receipt is evidence that the amount of the judgment debt has been paid. A creditor’s record of the payment may be lost, especially if the creditor is a large company dealing with many debts, and the creditor may take or continue proceedings to enforce the judgment as if there had been no payment. Should this happen, the debtor should at once seek a stay of enforcement of the judgment and an order setting aside, or reducing the amount sought by, the execution proceedings, using the receipt as proof of payment.

A creditor wishing to enforce a judgment must do so within 6 years from the date of judgment. Beyond that time, the creditor must obtain the leave of the court before proceeding.

Court Process - Judgment Summons and Oral Examination

A debtor is sent documents telling them that they are required to come to court at a certain date and time (this is called a ‘summons’). The summons may be for an Oral Examination or a judgment summons. If the debtor does not obey the summons for an Oral Examination and come to court, a warrant may be issued for their arrest.

When the debtor comes to court, if they have not already made an arrangement to repay the debt, they will be asked to stand in the witness box and swear on the bible to tell the truth (or affirm, if they are not of a Christian faith there is also Torah and a Qur’an available upon request). The debtor will then be asked questions about their finances, including goods that they own and their budget. This is to ascertain ways that the debtor may be able to pay the judgment debt.

This procedure is the same for both a Judgment Summons and an Oral Examination, except that on an Oral Examination the court is empowered to make an order that the debt be repaid in installments. It makes the process a lot quicker if debtors bring documents like bank statements and a written summary of their budget (incoming and outgoing), etc.

Oral Examination of Judgment Debtor

After judgment has been entered in their favour, a creditor may apply to the court for an order that the judgment debtor be orally examined as to the financial situation of the judgment debtor and what property or means the judgment debtor has of satisfying the judgment. The purpose of the examination is to gain information about the debtor’s financial situation to assist in choosing a method of enforcing the judgment debt. For example, the creditor may examine the debtor to discover the debtor’s employer or bank accounts so that garnishee proceedings can be taken. This procedure is often used in Tasmania. On the hearing of the summons the court has power to order the debtor to attend for oral examination, and to produce any relevant books or documents, such as bank statements, a written summary of their budget, evidence of their outgoing expenses, etc.

If a defendant is summonsed to an oral examination and fails to attend, the magistrate can issue a warrant for their arrest to compel their attendance. 

Judgment Summons

A similar procedure for bringing a debtor before a court to be examined is available under the Debtors Act 1870 (Tas)  It is this procedure which is more commonly resorted to because on the hearing of a judgment summons the court has power to order payment of the debt by installments. A judgment summons must be served not less than four clear days before the day on which the debtor is required to appear. Once served, the debtor is bound to appear to be examined as to his or her means to pay the judgment debt at the time and place set out in the judgment summons. If the debtor fails to appear, the magistrate can deliver a judgment without their presence.

If on the hearing of a judgment summons the court is satisfied that the debtor has, or has had, since the date of judgment, the means to pay the debt and has refused or neglected to pay it, it may commit the debtor to prison for six weeks, or until payment of the sum due (s4, Debtors Act 1870 (Tas)).

In practice, it is a good idea to contact the creditor or debt collection agency before your court date if you want to arrange a repayment. If this occurs at least 3 days before the court appearance, you may be able to avoid coming to court altogether as this will give the creditor time to advise the court that an agreement has been reached.

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