What is an Enforcement Warrant?
Pursuing an outstanding debt through the court system is a last resort. The process is time consuming, complex and costly.
If you decide to use the court system, you can ask the court to issue several types of Enforcement Warrants. These warrants allow you to recover your debt directly, rather than relying on the debtor’s cooperation.
In this article, we’ll discuss the common types of enforcement warrants and how they can be used to recover a debt through the courts.
Queensland’s Debt Recovery Framework
As a creditor, you have a legal right to recover any debts you’re owed. If someone can’t or won’t pay, you can negotiate with them, engage a debt collection agency and/or pursue repayment through the court system.
Debt disputes are handled by the following courts in Queensland:
- QCAT – amounts up to $25,000
- Magistrates Court – amounts up to $150,000
- District Court – amounts between $150,000 and $750,000
- Supreme Court – amounts over $750,000
If you do go to court, you and your debtor will have a chance to argue your case and present evidence at a hearing.
If you are successful, the court will issue a judgement against the debtor, requiring them to pay their debt. You become the judgement creditor if the court enters a judgement in your favour.
As the judgement creditor, you can make an application for enforcement warrants to recover the money you’re owed.
What is an Enforcement Warrant?
An enforcement warrant is used to enforce a court order or judgement against a debtor. The warrant allows you to collect any money you are owed as part of the court order or judgement.
There are five main types of enforcement warrant in Queensland:
- Redirection of earnings (garnishee order) – A redirection of earnings is served to a third party who owes money to the debtor (usually an employer). The third party is authorised to redirect part of the debtor’s earnings to the creditor.
- Regular redirections from financial institutions – This type of warrant is served on a financial institution such as a bank or credit union. The warrant directs the financial institution to regularly deduct money from a specified account and pay it to the creditor in instalments.
- Redirection of debt – This type of warrant is served on a third party that holds money on behalf of the debtor (e.g. a bank or client). The warrant authorises the third party to make a one-off payment to you, the creditor.
- Payment by instalments – An order for payment by instalments instructs the debtor to pay you in regular amounts over a set period of time.
- Seizure and sale of property – This type of warrant allows an enforcement officer to seize the debtor’s private property. It is then sold at public auction, and the proceeds are applied towards the outstanding debt, as well as any fees and expenses incurred during the sale process.
Enforcement options depend on your location. Each Australian state has its own procedures surrounding enforcement warrants. Visit your local Courts website for more information:
QLD | NSW | VIC | ACT | TAS | SA | NT | WA
Enforcement Hearings
Recovering money from an uncooperative debtor is challenging. Courts go to great lengths to ensure that enforcement warrants don’t cause undue hardship. However, they can only prevent undue hardship if the debtor’s financial position is fully understood.
Debtors are typically required to provide information about their financial situation during court proceedings. This information is used to determine how the debt is repaid.
If the debtor does not or will not provide this information, you can apply for an enforcement hearing. At an enforcement hearing, the creditor can request information about the debtor’s:
- Income and employer(s)
- Assets and liabilities
- Bank accounts
- Ability to repay the debt
The creditor and debtor are both required to attend enforcement hearings. The debtor may be arrested if they fail to attend.
Who Can Apply for an Enforcement Warrant?
An enforcement warrant can be obtained by the judgment creditor. You are a judgment creditor if a court has entered a judgment in your favour.
To become a judgment creditor, you must apply for a hearing with the relevant court. The relevant court depends on the amount of money you’re owed.
How Creditors Can Apply for an Enforcement Warrant
The legal process of applying for an enforcement warrant demands precise attention to detail, especially after initial collection attempts fail.
Becoming a judgment creditor
You’ll need to get a judgment or money order from a court before applying for an enforcement warrant. This status makes you an “enforcement creditor” and gives you legal rights to recover the debt. The court must have your judgment properly filed or registered before any further steps.
Choosing the right court based on debt amount
The courthouse that issued or registered your judgment or money order must receive your enforcement warrant application. Debt amounts determine which court handles your case – QCAT deals with smaller debts, Magistrates Court handles up to $150,000, District Court covers $150,000 to $750,000, and Supreme Court manages larger amounts.
Time limits and expiry rules
You can apply for an enforcement warrant within 6 years of the judgement or order. The warrant expires after 1 year, but it can be renewed if required.
These timeframes are generous, but obtaining an enforcement warrant can be a lengthy process. It’s important to work with a debt collection agency to ensure you’re acting within time limits and meeting your obligations as a judgement creditor.
What happens at an enforcement hearing
Many creditors find it helpful to request an enforcement hearing before applying for a warrant. The debtor must reveal their financial situation under oath during this court proceeding. Questions about the debtor’s assets, income, debts, bank accounts, and other financial details help determine the most suitable enforcement warrant type.
Remember that enforcement warrants should only be seen as a last resort. Professional debt collection services often offer budget-friendly and less confrontational alternatives to enforcement warrants.
How to Respond to an Enforcement Warrant as a Debtor
Legal pressure mounts on debtors after they receive an enforcement warrant, but they have several ways to respond. Creditors should know these possible responses to better predict how their collection efforts might unfold.
Applying to pay by installments
Debtors can ask the court to let them pay in installments. The court reviews several factors to make this decision:
- Current employment status
- Knowing how to pay within reasonable time
- Basic living expenses
- Other debts
- The quickest way to enforce judgment effectively
You might want to accept these payment arrangements sometimes, especially if pushing too hard could drive debtors into bankruptcy.
Requesting a stay of enforcement
A stay puts all enforcement actions on hold temporarily. Courts only grant stays in rare cases. This happens when debtors find new evidence after the judgment or challenge a default judgment. Courts rarely approve stays because they believe creditors have the right to enforce judgments.
Attending enforcement hearings
Debtors must show up at enforcement hearings with their financial records, including bank statements, payslips, and tax returns. The court can issue an arrest warrant if debtors skip the hearing without a good reason. These hearings require debtors to answer questions under oath about what they own, earn, and owe.
Consequences of ignoring a warrant
Serious problems await debtors who ignore enforcement proceedings. Courts might issue arrest warrants. There’s another reason to comply: debtors who skip hearings face contempt charges and additional costs. Magistrates can order community service or jail time as a last resort.
Manage the Collections Process With Dynamic Commercial Collections
Obtaining an enforcement warrant is the last resort when recovering debt. The most cost and time effective solution is to work with a debt collection agency.
Dynamic Commercial Collections offers professional debt collection services with offices in Brisbane, Bundaberg and Perth. We use ethical and debt collection techniques and have a 95% success rate in recouping outstanding debts.
While we recommend avoiding court wherever possible, we can also provide support if legal action is required. Contact us to find out more about enforcement warrants and other debt collection options.