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Default judgments and how to enforce them in debt recovery matters

What is a default judgment?

A default judgment is a sanction of the court which effectively disposes court proceedings without a trial. You will often hear about this after the plaintiff has served a statement of claim or summons on the defendant, and the defendant failed to respond in time. A default judgment is available in the civil jurisdiction of the Local Court, District Court and Supreme Court.

In the context of debt recovery, obtaining a default judgment would order that the defendant must pay you money or return your goods. However, a default judgment is not the end of the story; it is merely the precondition for a range of court remedies. According to s 17 of the Limitation Act 1969 (NSW), you have 12 years, from the date the default judgment is entered, to enforce it. This article will briefly explore the three most popular remedies, namely bankruptcy, garnishee order and writ for levy of property.


This is a term that appears in the media quite often. Particularly in 2020, we have heard a number of companies crumble under crippling debt including Virgin Australia. The purpose of bankruptcy is to liquidate most of the assets of the defendant and obtain some of the earnings of the defendant for up to 3 years after the date of bankruptcy. Bankruptcy proceedings can be started in the Federal Courts soon after default judgment is handed down, provided the total judgment debt amounts to at least $10,000.00. However, the method of bankruptcy can be costly, lengthy and very technical. Another disadvantage is that there may be other secured creditors, who rank ahead of you in priority, and thus full payment of the debt may not be received.

Garnishee order

As for the garnishee order, the third party (known as the “Garnishee”) will be compelled to pay their debt to you instead of the defendant. Examples of Garnishees include banks, employers, real estate agents, debtors and other financial institutions.  The debts have to be existing debts which are due at the time of serving the garnishee order. The debtor’s cheque accounts, term deposits in banks, saving accounts in banks, money held on fixed deposit are subject to a garnishee order. If the defendant’s bank account balance is too low, the bank does not have to comply with the order.

Writ for levy of property

To successfully execute the writ for the levy of property, you must know that the defendant has the relevant property which can be seized by the sheriff to satisfy the debt. The relevant properties may include any goods in which the judgment debtor has a beneficial interest, money belonging to the judgment debtor, cheques, bills of exchange, promissory notes, bonds or other securities.

Order for Examination

If you do not have enough information about the defendant’s income or assets, you could issue an order for examination which compels the defendant to appear in Court and present answers.

Take action now before it is too late. Contact Legal Point Lawyers today for a consultation. With over 15 years in the legal field, we can help you significantly boost your chances of recovering your debt quickly and smoothly.

Disclaimer: This publication is general information only and does not purport to provide legal advice. We do not accept responsibility for any losses for reliance upon this publication.

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