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Creditors' options
Once a judgment has been made in a creditor’s favour, there are various steps they can take to get the money owed.
Usually the action a creditor takes depends on whether the debt is secured (for example, by a house or a car) or unsecured. The secured creditor can also use remedies available to unsecured creditors, but only after the security has been sold and only for the amount still owing (if any) once the security has been sold.
The options below are the legitimate options. Sometimes there is a fine line between exercising legal options and harassment, a point which creditors and collection agents often forget. You do not have to put up with harassment. See ‘Debt collection' (link below).
Once judgment has been made against you, the creditor can use the legal remedies listed below. The creditor does not have to choose one option before another.
Summons for oral examination
A hearing to find out about your income, expenses, assets and liabilities. See ‘Summons for oral examination’ (link below).
Instalment order
A court order that requires you to pay the debt by instalments. You or your creditor can apply for this. See ‘Instalment orders’ (link below).
Attachment orders
When someone owes you money, and you owe money to somebody else, the court can make orders about what happens to the money owed to you. This is called ‘attachment’.
The court can attach wages that you earn, or a debt that someone owes you.
Attachment of earnings
A court order directing your employer to pay an amount out of your wages to your creditor. See ‘Attachment of earnings orders’ (link below).
Attachment of debt
A court order to a person who owes you money to pay that money direct to your creditor. An attachment of debt can be made against a bank account. See ‘Attachment of debt orders’ (link below).
Warrants
Warrants are directions from the court to the sheriff or police to carry out court orders. If you receive a warrant seek legal advice quickly. See ‘Warrants to seize & sell property’ (link below).
Petition for bankruptcy
A creditor or group of creditors can request a court order (‘petition’) for your bankruptcy. If the order is made you must give control of your financial affairs to a bankruptcy trustee. The trustee is responsible for working out if, and how much, your creditors can be paid.
Creditors will probably take this action if they believe you have assets or that you are avoiding paying a debt you are able to pay. Some may see it as punishment. See 'Bankruptcy' (link below).
More information
Warrants to seize and sell property
Related publications
Debt problems: the law, your options
How we can help
Call Victoria Legal Aid’s (VLA) Legal Information Service for free information over the phone about the law and how we can help you with your legal problem. You can speak to a legal information officer in English or ask for an interpreter. Phone (03) 9269 0120 or 1800 677 402 (country callers), Monday to Friday from 8.45 am to 5.15 pm.
VLA’s other free legal services include:
- advice at VLA offices and other locations across Victoria
- lawyers who are on ‘duty’ to help at many courts and tribunals.
For some matters we can provide you with a lawyer to help you run your case.
To find out more about any of our legal services see What we do.
Who else can help?
See Getting help with financial problems for details of free financial counselling services in your area and other organisations that can help you.