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If you decide to use or rely on the information or make decisions based on the information in this website (which VLA does not recommend) VLA is not liable to you or any third party in any way for any loss, damage, costs or expenses you or they may suffer or incur as a result.

Enforcement of a civil debt

Information about how a debt is enforced when a person is in prison.

If a judgment debt is made in either the Magistrates’ Court or at the Victorian Civil and Administrative Tribunal (VCAT) it can be enforced by the creditor. To enforce the debt, the creditor will need to take further court action to make the debtor pay.

If an order is made at VCAT, the order will need to be registered in the Magistrates' court before the creditor can take action to enforce the debt. Once this is done, the order is treated as though it was an order made in that court.

See s. 121—Victorian Civil and Administrative Tribunal Act 1998 (Vic)(opens in a new window).

How to stop proceedings

If judgment has not yet been made the client may be able to stop proceedings by applying to the Australian Financial Complaints Authority, or by applying for an instalment order. If judgment has been made the client may be able to seek a rehearing.

See Legal action in court or Small debts and VCAT.

How debts are enforced

Debts can only be enforced by application to court for one of the following:

  • Summons for oral examination
  • Warrants for seizure and sale of property
  • Sale of house or land, or
  • Attachment of earnings.

Note: If a client is on Centrelink and has no assets that can be seized or sold then the debt cannot be enforced. Write to the creditor outlining the client's circumstances and ask that the debt be written-off or waived.

See s. 60—Social Security (Administration) Act 1999 (Cth)(opens in a new window) and Negotiating with a creditor.

Summons for Oral Examination

The judgment creditor will apply to the court to issue a 'Summons for Oral Examination' (SOE) (Form 67A), which is served with a form 67B – 'Examination of a judgment debtor'. This examination form sets out a number of questions that the debtor must answer.

These forms are set out in Magistrates' Court General Civil Procedure Rules 2020 (Vic)(opens in a new window) and Forms.

What to expect at the hearing

During the summons for oral examination the registrar may examine the debtor about their:

  • income
  • property and assets, cash readily available
  • debts
  • liabilities, and
  • other financial obligations.

See r. 67.01—Magistrates' Court General Civil Procedure Rules 2020 (Vic)(opens in a new window).

If the client has assets

Once a creditor knows that the debtor has assets in the form of property, the creditor will often seek the issue of a warrant for the seizure of property to satisfy the judgment debt (Form 68A).

If a debtor fails to answer a Summons for Oral Eexamination, they are potentially liable for arrest.

See Forms.

Warrants for seizure and sale of property

The Magistrates’ Court can issue a warrant to seize property. The warrant gives authority for the person to whom it is directed (usually the sheriff) to seize and sell property belonging to the judgment debtor.

See o. 68—Magistrates' Court General Civil Procedure Rules 2020 (Vic)(opens in a new window).

Limits on what can be taken

The Supreme Court Act 1986 places limits on the kind of property that the Sheriff can take to satisfy a debt. The Act says that the limits that apply to people who are bankrupt should also apply to those who have been judged to owe a debt. For example, they must allow enough beds for everyone in the family, washing machines, phones, video recorder, stereo, TV and other essential items.

The debtor may also keep a vehicle and tools for their trade up to particular values. These values are changed each year in line with the consumer price index and are listed on the Australian Financial Security Authority site.

See:

Sale of house or land

The County Court or Supreme Court will issue a 'Warrant of seizure and sale' if a judgment creditor wishes to seize and sell a person’s real property (house or land).

A debtor may seek an instalment order so that they can pay their debt off gradually. They can apply for this up until the time that the property is sold. If an order is granted this will stop the Sheriff from taking any further action.

If a judgment creditor is seeking to seize and sell a prisoner’s land, it is essential that the prisoner gets detailed advice about their legal rights.

The procedure is governed by rules 68, 69 and 70 of the Civil Procedure Rules in the County Court and Supreme Court. The seizure and sale of land is a complicated area of law. The client should contact the Consumer Action Law Centre or a financial counsellor.

See rr. 68, 69, 70—Supreme Court (General Civil Procedure) Rules 2015 (Vic)(opens in a new window).

Attachment of earnings

An attachment of earnings is when a creditor applies to court for an order that an employer deducts an amount of money from a person’s wages to pay off a debt. The money is paid directly to the creditor.

See rr. 72.02 – 72.16—Magistrates' Court General Civil Procedure Rules 2020 (Vic)(opens in a new window).

More information

Legislation

Victorian Civil and Administrative Tribunal Act 1998 (Vic)

  • s. 121—enforcement of monetary orders

See Victorian Civil and Administrative Tribunal Act 1998 (Vic)(opens in a new window).

Civil Procedure Act 2010 (Vic)

See Civil Procedure Act 2010 (Vic)(opens in a new window).

Social Security (Administration) Act 1999 (Cth)

  • s. 60—protection of social security payment (payment is inalienable, cannot be transferred to another)

See Social Security (Administration) Act 1999 (Cth)(opens in a new window).

Supreme Court Act 1986 (Vic)

  • s. 42—property available to satisfy a judgment debt

See Supreme Court Act 1986 (Vic)(opens in a new window).

Bankruptcy Act 1966 (Cth)

  • s. 116—property divisible among creditors

See Bankruptcy Act 1966 (Cth)(opens in a new window).

Supreme Court (General Civil Procedure) Rules 2015 (Vic)

  • o. 68—warrants of execution generally
  • o. 69—warrant of seizure and sale
  • o. 70—warrant of possession

See Supreme Court (General Civil Procedure) Rules 2015 (Vic)(opens in a new window).

Bankruptcy Regulations 2021 (Cth)

  • r. 27—household property that is not available for payment of debts
  • r. 28—personal property of sentimental value not available for payment of debts
  • r. 29—tools that are not available for payment of debts
  • r. 30—motor vehicles that are not available for payment of debts
  • 6.03Property available for payment of debts

See Bankruptcy Regulations 2021 (Cth)(opens in a new window).

Magistrates’ Court General Civil Procedure Rules 2020 (Vic)

  • r. 67.01—examination of a judgment debtor
  • o. 68—warrants and execution
  • o.72—attachment of earnings

See Magistrates' Court General Civil Procedure Rules 2020 (Vic)(opens in a new window).

References

Australian Financial Security Authority

This site has information about the value of properties that cannot be seized to repay a debt.

See Australian Financial Security Authority—Indexed amounts(opens in a new window).

Consumer Action Law Centre

This specialist community legal centre can assist a prisoner who has a problem with an outstanding debt.

See Consumer Action Law Centre—Legal Help(opens in a new window).

Fitzroy Law Handbook

Fitzroy Legal Service's handbook has information about debts.

See Are you in debt?(opens in a new window)

Updated