Many creditors who successfully obtain a court judgment against a debtor are surprised to find that payment does not automatically follow. A judgment is a court's formal declaration that the debt is owed — it is not a payment. To convert a judgment into money, you need to enforce it. Understanding the available enforcement mechanisms determines how quickly and how effectively you can collect.
How judgments are obtained
In most commercial debt matters, judgment is obtained by default — where a claim is filed, the debtor does not respond within the required period (typically 28 days), and the court enters judgment in the claimant's favour without a hearing. For smaller claims in the Magistrates or Local Court, this process can be completed in two to six weeks. Contested matters take longer and involve more cost.
The level of court matters: a Magistrates Court judgment (up to $100,000 in most states, $200,000 in New South Wales) is cheaper to obtain but has different enforcement procedures than a District or Supreme Court judgment.
Garnishee orders
A garnishee order is one of the most effective enforcement tools available to a judgment creditor. It directs a third party — typically the debtor's bank — to pay a specified amount from the debtor's account directly to the judgment creditor. If the debtor's bank account is identified, a garnishee order can convert a judgment into cash very quickly.
Garnishee orders can also be issued over wages or salary — directing an employer to deduct a portion of the debtor's pay — though this is more commonly used in personal debt recovery than commercial recovery.
Writ of execution (sheriff enforcement)
A writ of execution authorises the sheriff (or bailiff) to attend the debtor's premises and seize assets to the value of the judgment debt. The seized assets are then sold, and the proceeds applied to the judgment. This mechanism is most useful where the debtor has identifiable, saleable assets and is less effective where the debtor operates from rented premises with minimal owned assets.
Examination of the debtor
Where you do not know the debtor's financial position, a court can summons the debtor to attend an examination hearing at which they must answer questions about their financial circumstances under oath. This mechanism is used to identify assets, bank accounts and income before selecting the most appropriate enforcement method.
Judgment debt interest
Once a judgment is entered, interest accrues on the outstanding amount at the applicable court rate — which varies by court and jurisdiction but is generally set annually. This means delay in enforcement carries a real cost for the debtor. Judgment interest calculations should be included in any enforcement application.
Registration in other states
A judgment obtained in one Australian state can generally be registered in another state under the Service and Execution of Process Act 1992 (Cth), enabling enforcement across jurisdictions without obtaining a second judgment.
If you have a judgment and are unsure how to enforce it, or if you have a debt that warrants legal proceedings, speak to Merion about the most effective path forward.