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First of all, you cannot be sent to jail for not paying a debt.
The laws vary among each Australian state and territory for court judgments. This information applies to local and magistrates courts. If you are getting court notices or demands ring Money Buckets immediately - 1800 825 010
Check whether there is an actual court judgment against you and not just a threat. Normally you should receive a legal letter giving notice of the Court Case. You can appear or contact the court to fill in a Hardship request and request a payment plan. If you find this too stressful, Money Buckets can try and negotiate directly with the creditor to organise a payment plan before it goes to court, so contact us immediately you receive a Letter or notification.
A creditor may tell you they have a court judgment but if you don’t have a formal court letter you should check by calling the court and asking the following:
What amounts can the creditor add on to a court judgment?
The creditor who has a court judgment can add the following costs to the judgment debt:
Do you have a reason why you may not owe all or part of the debt?
If you believe you have a reason or argument why you do not owe any, or part, of the debt you need to get legal advice. How you move forward will depend on the type of court judgment it is.
There are two types of court judgment:
If you have a judgment against you, the only option available through the courts to change that decision is to appeal it. That means you lodge an appeal with a higher court for that decision to be reviewed. There are short time limits to lodge an appeal (usually 28 days) and you need to get legal advice urgently if this applies to you.
If you have a default judgment you may be able to set aside the judgment if you have an arguable defence (a reason you do not owe all or part of the debt). If the court believes you have an arguable defence, it may set aside the original decision and hear the matter. You need to get legal advice if you believe you have a defence.
If you do owe the money MoneyBuckets can include Court Judgments into Part IX Debt Agreements and Bankruptcies or negotiate a repayment Plan on your behalf. This will resolve the court Judgment into a Debt Solution.
If you do nothing a Creditor can:
If this is the case, your still have the option, at this stage, to put this Debt into a Part IX Debt Agreement and propose a payment plan that includes all your creditors. If the majority of creditors vote in favour of your Debt Agreement (over 50% of the Debt value), then the Creditor who has the court judgement against you has no choice but to accept the plan. They will receive payment as part of your Debt Agreement from payments you make.
You also have the choice to Declare Bankrupt, which will stop the Garnishee.
Court judgments and your credit report
Court judgments will be listed on your credit report. The court judgment will remain on your credit report for 5 years from the date of the judgment. Court judgments may make it difficult for you to get credit or you may have to pay a higher interest rate on any credit you get.
When you may not have to pay a judgment debt
If you do not have any assets other than household items, do not own any real property (for example, a home or block of land), your car is worth under $7800 and your only income is a Centrelink payment you may be protected from having to pay the judgment debt or the judgment debt may be difficult to enforce. Call us to get advice if this situation applies to you.
When your only income is Centrelink
If Centrelink payments are your only income, you are protected from any of your fortnightly payments being taken from Centrelink. However, it may be possible for accumulated savings from Centrelink payments to be taken from your account if a court order is obtained.
Judgment Debt Recovery Act Vic
In Victoria, section 12 of the Judgment Debt Recovery Act provides that an installment order will not be made if your income is only Centrelink. This means in effect that a debtor cannot be forced to pay a judgment debt if their sole source of income is Centrelink and they have no significant assets.
Customer Enquiries: 1800 825 010
Admin Office: 0243696287
Post: PO Box 6100, Kincumber, NSW, 2251
Money Buckets ™ is a Trademark of Starlight Home Loans T/as Fast Debt Help
ABN: 94 145 613 056
Credit Lic 388809
MFAA membership 319292
Affiliates: Second Step Administration RDAA 1668
The Rite Place Pty Ltd trading as Debtrite