INDUSTRY IN FOCUS
30
|
HIRE
AND
RENTAL
NEWS
| MAY 2013
is available which suggests your customer
does not have the capacity or assets to
meet any judgment ordered in your favour,
there is a real risk any legal costs you incur
as a result of any enforcement action
taken may also become irrecoverable. If
your customer is still trading, the prospects
of recovery are increased.
The common forms of enforcement
available include:
1.
Commencing bankruptcy proceedings
where your customer is an individual
and the judgment debt is $5,000 or
more. The process involves requesting
the Insolvency and Trustee Service
Australia to issue a bankruptcy notice.
If the customer fails to comply with the
bankruptcy notice within 21 days, this
is an act of bankruptcy you may rely
upon as the basis to seek a sequestration
(
bankruptcy) order from the Federal
Court or the Federal Magistrates Court.
If a sequestration order is made, a
trustee is appointed to take control of
the bankrupt’s property, sell it, and pay
dividends to the bankrupt’s creditors.
If the application is not contested, a
trustee will usually be appointed by the
court within four to six weeks of the
filing of the application.
2.
Commencing proceedings to wind up a
customer that is a company where the
debt is $2,000 or more. The basis of this
application is usually a statutory demand
requiring payment of a judgment debt
has not been complied with (see the
‘
Statutory demands’ section above). An
application is filed with the Supreme
Court or Federal Court seeking an order
to wind up the company and to have a
liquidator appointed. The orders to wind
up the company and have a liquidator
appointed may be obtained urgently if,
for example, there is evidence available
the company is taking steps to dispose of
its assets to avoid obligations owed to its
creditors. If the application is not urgent,
and it is not contested, the court will
determine the application. A liquidator
will then take control of the debtor’s
assets, sell them and distribute proceeds.
3.
Applying for a garnishee order, such
as in relation to your customer’s bank
account. This is a Court order that
requires your customer’s bank to pay
any funds held in the customer’s bank
account to you in satisfaction of the
judgment debt. Such orders can be
effective if they are obtained quickly.
4.
Applying to have the Sheriff attend
your customer’s premises to seize goods
to sell them to satisfy the payment
of your debt. The threat of the
Sheriff’s attendance at your customer’s
residential or business premises serves to
place added pressure on the customer to
make arrangements with you to satisfy
the debt which is owed. A disadvantage
with this process is execution can take
some time and a third party may claim
ownership of property.
An overriding factor is a comparison
of the amount of the judgment, the
costs associated with enforcement of the
judgment, and the likelihood of recovery.
That said, it is our experience
debtors often pay their debts or make
arrangements to pay by instalments at the
commencement of enforcement action,
upon realising the creditor is serious about
collecting what is owed and the possibly
dire consequences of doing nothing.
Contact: 02 8281 7898 or visit website:
www.bartier.com.au
HR
It pays to break the vicious debtor cycle.... continued from p28
For more inFormation
contact your local
branch on 1300 737 787
www.parchem.com.au
concrete &
construction
equipment For
the hire industry
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