Introduction to Creditors' Remedies (10:I)
There are legal remedies available to creditors to enforce a debt, but the related procedures are frequently time-consuming and potentially costly, and there is no guarantee that the creditor will actually receive all of the funds owed. The most important reason for starting civil proceedings to collect a debt is to permitthe creditor to execute on their judgment. Such execution proceedings may include:
- examinations in aid of execution (to determine the debtor’s ability to pay the debt);
- subpoena to debtor hearing (to obtain a court order compelling the debtor to make payments on the judgment);
- garnishment (to compel third parties to pay funds into court to the credit of the judgment rather than pay those funds to the debtor); and
- collection by execution (to lodge a writ of execution with the bailiff who will then seize and sell the debtor’s assets and pay proceeds to the credit of the judgment).
A judgment may also be filed on the title of real property owned by the debtor and will remain on the title of that property for two years unless it is discharged by the debt being paid or bankruptcy, or the creditor commences execution proceedings against the land.
Before giving advice to creditors, a student should ask a number of questions. The first is whether the good is a secured interest, and, if so, whether it is a consumer good. If the debt is unsecured, a charge cannot be registered against the property, unless the property is the subject matter of the dispute. However, after a judgment is obtained a charge can be registered against any property owned by the judgment debtor. Although LSLAP helps comparatively few creditors, this half of the chapter should answer most questions for matters that LSLAP may be able to help with.
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