Queensland Civil and Administrative Tribunal was introduced to assist people resolving debt disputes up to and including $25,000.00.
If you obtain a favourable decision for a debt from QCAT then the next hurdle you face is enforcing the decision. The decision is not a judgment. The decision in your favour will stay in effect for 6 years, so you need to commence enforcement proceedings within that time. QCAT will not enforce the decision. You will need firstly to register the decision in the Magistrates Court to obtain judgment. The effect of judgment is that it registers the debt on the other person’s (the debtor’s)credit file and provides you with the judgment to commence the enforcement process. You then have 12 months from the date you get judgment to take enforcement action.
You have several options to enforce the judgment. It is pointless however to expend your time and money if the debtor has no assets and no ability to pay the judgment debt. If you are unsure as to the debtor’s financial position, it is worthwhile to spend a few dollars making inquiries, as that could be money well saved.
Once you are satisfied that the debtor has the ability to pay the judgment debt, then your options should be considered. Depending on the amount of the debt you may be able to commence bankruptcy proceedings. The threshold for that option is that the judgment must be more than $5,000.00. Making the debtor bankrupt will enter the debtor’s name on the National Insolvency Register. Bankruptcy normally lasts 3 years. The bankrupt debtor will have to surrender his or her passport and their assets will vest in the Bankruptcy Trustee.
You will not get first bite of the cherry for payment of your judgment debt when the assets of the debtor are converted to cash for distribution amongst the debtor’s creditors. You will however receive your “taxed” costs of the bankruptcy proceedings as a priority payment. The bankruptcy trustee will also receive its costs of the bankruptcy administration as a priority. After those payments are made the Bankruptcy Act provides the order in which the bankrupt estate will be distributed. Your entitlement to recover your judgment debt comes after payment of moneys owed to secured creditors.
Alternatively you can apply to the Court for an enforcement hearing. This allows you to obtain a statement of the debtor’s financial position. You can request that the debtor be called to answer questions in court to ascertain his or her financial position.
Once you know the debtor’s financial and asset position, you can choose from a range of processes, namely –
- Applying for a warrant for redirection of the debtor’s earnings which direct the debtor’s employer to pay part of the debtor’s wages to you each pay day.
- Applying for an enforcement warrant for redirection of a debt. That directs a third party who owes money to the debtor to pay that money to you instead of the debtor.
- Applying for an enforcement warrant for regular redirection from a bank or financial institution to redirect regular payments received by the debtor to you. An example of this is rental moneys received by the debtor from an investment property.
- Applying for an enforcement warrant for seizure and sale of property. The warrant allows an enforcement officer to seize and sell property belonging to the debtor.
Depending which option you choose will also determine the financial outlay you will need to make to recover the debt.
This is a general overview only. For more detailed advice please contact our office.