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A common obstacle thrown in the path of a creditor seeking to recover a judgment debt is an application to Court to pay the debt by instalments. If the order is made, it acts as a complete barrier to any further attempts to recover the debt (provided the instalments are paid on time).
It is often difficult to advise creditors on whether it is worth the time and cost of opposing such an order. Creditors could easily be forgiven for thinking that each Court has its own view of what constitutes a fair and reasonable proposal. Opposing an instalment order involves filing documents and making submissions to the Court, adding to the time and cost of chasing the debt.
Before committing more of your businesses resources to fighting an instalment order, it is worth considering these issues:

  • The Court does not merely “rubber stamp” an application to pay by instalments. The application will be reviewed and considered by the Court regardless of whether you oppose it, based on the information provided by the debtor. However, even if the Court refuses to make the order, the debtor can make another application.
  • If you know for a fact that the debtor has provided false information in their application, and you can prove it, that would be a strong factor in favour of opposing the application.
  • If a Court grants an instalment order, any breach of that order will revoke it. It might be worth waiting to see if the debtor fails to make an instalment, thereby saving yourself the cost of opposing the order.

At Matthews Folbigg lawyers, our experienced debt recovery team has advised our clients on when to make, and when not to make, an application opposing an instalment order. As with all our advice, our focus is on the commercial realities and not the legal theory.

Please feel free to contact Jeff Brown or

Jennifer Calleja on (02) 9635 7966.