Legal notices - what they mean and what to do about them!
LETTER OF DEMAND or FINAL NOTICE
This is a letter from a lender or service provider (or their solicitor) used as a warning or threat of legal action to prompt payment. Sometimes the letter states that if you are unable to pay, legal action may follow.
You have the right to dispute the debt or amount of the debt, and any additional fees claimed. Further Details here
COMPLAINT FORM 5A - Magistrates Court (Summons)
This document must be delivered to you in person or given to someone over 16 years old at your work or home. It means that court action has already been started to recover an outstanding debt.
Act quickly - you have 21 days from receiving this form to either:
- settle the debt by payment in full or pay a lump sum with a full and final offer to settle the debt or negotiate an instalment agreement
- give a 'notice of defence' to have the court decide the matter, then attend court to argue the matter. You should seek legal advice if you wish to defend.
If you do nothing, a court will make an order or "judgement" against you and debt recovery action will follow. Debt recovery action can include the following possibilities:
SUMMONS FOR ORAL EXAMINATION
Only issued by a creditor who has judgement against you for a debt, to check your ability to pay them back under oath in Court.
You are required to attend the court at the specified date and time. This is usually not held in an actual court room but in the Registrar's office. You will need to provide details of your financial position such as income, assets, expenses, loans, debts, dependents.
You will be asked what you can pay and you can suggest an affordable instalment amount or advise you are unable to pay. The creditor will then decide what steps to take next. Note: your suggesting an instalment amount does not constitute an instalment order (the creditor is not ordered/obliged to accept it).
ATTACHMENT OF EARNINGS
This is an application to the court by the creditor to seek to 'garnish' your wages (take instalments from your pay before you receive it). If successful, your employer will get notice and must comply with this request. This is not always an affordable amount so if this happens and you find yourself in extreme hardship, contact a Financial Counsellor.
Note: This cannot happen when on Centrelink.
WARRANT TO SEIZE PROPERTY
This is one option a court can grant to help the creditor recover the money you owe. The warrant permits the Sheriff to enter your property and take your goods to sell off in order to recover money owed.
The Sheriff cannot take basic household goods such as essential furniture and clothing or a car worth less than $7,500.
To avoid property being taken, you can apply for an 'instalment order' (see below) to pay off the outstanding debt if your income permits.
WARRANT OF SEIZURE AND SALE ( Real estate)
This permits the Sheriff to sell your or your share of land, home, or other real estate. Before the land is sold you can apply for an instalment order to pay off the outstanding debt if your income permits.
You should seek urgent legal advice to protect your assets if this Warrant has been issued for your property.
After judgement has been obtained, either the borrower or the creditor can apply for an instalment order. An amount is nominated and the court determines whether to accept this. If you have tried to informally arrange lower instalments and the credit provider has been unwilling to accept the amount, you may find a Court will accept it and the creditor will be ordered to take it.
However, if the amount is considered too low by the court it won't be accepted and the creditor will consider other options to recover the debt.