What are Instalment Orders?6-March-2013 Commercial Disputes
Following your attempts to recover a debt, firstly through a Letter of Demand and subsequently after the debtor has been “served” the Statement of Claim papers, the court’s jurisdiction will come into play.
The Statement of Claim gives the defendant 28 days after service of the document to pay the debt, come to an arrangement with the plaintiff for payment of the debt by way of instalments, or file a defence to the claim.
Instalment orders – Stay of Execution
At any time following the entering of judgment, a debtor may apply to the Court to pay the judgment debt by instalments.
The debtor will indicate to the court an amount they can pay either weekly, fortnightly or monthly to the creditor but the creditor has the option to object to the instalment orders by making an application to the Court.
If there is an objection, each party must make submissions before a Registrar as to the appropriateness of the order.
While an instalment order is in place, the judgment to pay the debt in full will be stayed and cannot be enforced. But if a debtor fails to make payments in accordance with the instalment order, the creditor can file an Affidavit of Non-Compliance in the Court registry, which will lift the stay and allow enforcement of the judgment debt.
Generally the Local Court will only allow an instalment arrangement if the debt is to be paid within a couple of years.
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