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Debt recovery – comparison between polish and australian system

Opublikowany dnia 1 Gru. 2016

windykacja-naleznosciNicholas Gowland – australian law student

The preliminary stages of debt recovery are very similar in Poland and Australia. Briefly, these include an informal notification of late payment to the debtor, followed by a formal debt recovery letter (often issued by a lawyer on behalf of the creditor), and culminating in the filing of a statement of claim to initiate of legal proceedings in pursuit of a judicial order for payment. Where this is successful, in both systems the court will issue an enforcement order for the debtor to settle their debt.

However, once a creditor has acquired a judicial order in their favour, the Australian legal system offers numerous flexible methods for them to enforce an order that the debtor fails to comply with, depending on the circumstances of their case.

Where a creditor does not know of the current financial position of the debtor, they can pursue an examination notice, which requires the debtor to produce evidence of their assets, liabilities and income. Failing to comply with this summons order is a crime, and if a debtor does not provide the relevant information, the court can issue a warrant for their arrest.

Based off of this information, the creditor might decide to seek to recover the debt through a writ (i.e. order) of execution and/or against land, whereby the court will order the sheriff to seize the debtor’s personal assets and/or land, and sell it at auction to pay off the debt.

Alternatively, a creditor might apply for a “Garnishee order”, whereby a court will order a third party who owes money to the debtor, such as an employer or contracting partner, to pay the creditor instead. If this third party fails to comply with the Garnishee order and pay the creditor, they themselves will become liable to the creditor.