I have previously written in the past about the debt recovery process on our blog – if you’ve read it, I hope that you found it helpful.
If you are successful in obtaining a court judgment against the debtor, or rather, the person who owes you money, but they still aren’t paying it to you, you still have a number of options available.
Examination
An examination should ideally be the place where you should start if you are not sure about the debtor’s financial position. This is a process to compel the debtor to provide with information about their income, assets, and liabilities. With this information, you can then decide whether further action should be taken.
If the debtor fails to comply and refuses to give you the information you can ask the court to issue a warrant for the debtor’s arrest – this sends a sheriff out to their residence or their workplace – the debtor is then brought to court to answer questions about their financial situation.
Levy of Property
If the debtor owns personal or real property, you can ask the court to issue a writ of levy of property. When issued, the sheriff will go to the debtor’s residence and try to seize property. The seized property would be sold in due course, and the proceeds of the sale disbursed to you.
In certain circumstances, the levy can apply to a sale of real property.
As this is quite drastic, more often than not, to avoid this result, a debtor would take steps to avoid the sale of their property.
Garnishing Wages or Amounts Held in a Bank Account
If you know where the debtor works or who the debtor banks with, you can ask the court to issue orders to the debtor’s employer or bank, directing them to set aside a portion of their wages or withdrawing amounts held in their bank account to pay to you.
Bankruptcy
If the debt is more than $10,000 you can seek for the debtor to be declared a bankrupt. Bankruptcy is a serious deal – the debtor loses control of all his financial affairs and a trustee is appointed to investigate and look after the debtor’s financial affairs, and where possible, make payments to the debtor’s creditors.
This can be an expensive and complex method of enforcing the judgment, however it can be effective in certain situations given the severity of the situation.
Winding Up
Winding up is similar to bankruptcy however it affects companies, not individuals. Winding up also has a lower threshold – a debt of $2,000 is sufficient to seek for a company to be wound up.
Once again, it is an expensive and complex method of enforcing the judgment, however it can be effective method in certain situations.
Finally, you have 12 years from the date of the judgment to enforce your debt – past that date it becomes statute barred.
If you have any questions about how all these work, give us a call at our office and we’ll be pleased to help you out.