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Struggling to Enforce a Judgment Against a Debtor?

If you have obtained a judgment against someone who owes you money (called a “debtor”), you can sometimes run into trouble enforcing that judgment if the debtor applies for an Instalment Order to pay the debt. Whilst the Instalment Order is in place, and the debtor is abiding by it, you won’t be able to enforce your judgment in other way (such as bankruptcy proceedings, garnishees or writs).
Often, it may be that if a debtor is suffering financial hardship or not able to pay the debt in full immediately, an Instalment Order may be your best bet of getting paid and it won’t be worth objecting to. If the debtor fails to abide by the Instalment Order, it ceases to have any effect, and you can continue to enforce the judgment in other ways. Or, if the debtor comes into a windfall or gains better employment at a later date, you can apply to the Court to vary or rescind the Instalment Order on this basis.
Initially, however, the debtor will often apply to pay very small amounts by instalments, and sometimes with a huge judgment debt, this can mean years and years before you finally recover your money from them in full. In this situation, or if you think that the debtor can afford to pay more than they are saying, you may wish to object to the Instalment Order and try to have it set aside or varied.
In order to be successful in obtaining an Instalment Order, a debtor will have had to prove to the Registrar of the Court that that their financial circumstances are such that they cannot afford to pay the debt in full, and can only afford to pay the debt in instalments over a certain period. To do this, they will have had to provide their financial details to the Court, such as their income and liabilities, and the Registrar will make a decision about the Instalment application based on their view of the debtor’s financial circumstances.
Nevertheless, although the financial hardship of the debtor is an important consideration in the Registrar’s decision to make the Instalment Order, the Court understand that the debtor’s financial circumstances should not be the only consideration. After all, you have a judgment against the debtor for a reason, and you should be entitled to the benefit of that judgment.
You can object to an Instalment Order made by a Registrar within 14 days of having received notice that it has been made. There are a number of grounds on which you may be able to object to the making of an Instalment Order, including:
1. If the debtor’s financial position is such they can pay the debt immediately;
2. If it is obvious the debtor will not be able to comply with the Instalment Order;
3. If the time it would take to pay the debt by instalment is unreasonably long (for example, depending on the specific circumstances, 12 to 24 months is usually considered to be a “reasonable time” to repay a debt) ;
4. If there would be no real reduction of the debt because of the amount of interest that will accrue;
5. If you, as the Judgment Creditor, will suffer hardship if the debt is paid by instalments.
Once you file an objection, the Court will set a time and date for the matter to be heard and you will be able to state your objections as to why the Instalment Order should not be made. The Court will consider your objections and weigh them up against the financial hardship that may be suffered by the debtor if the order is not made (such as the potential for bankruptcy).
Even if the Court does not dismiss the Instalment Order completely, the Court may decide to vary it so that the debtor needs to make larger payments towards the debt to address your objections, so objecting to the Instalment Order can often be well worth your time as a Judgment Creditor.