Debtor (when you owe money)

What can I do if I am con​tacted by a debt collector?

In some cases, a creditor may arrange for a debt collector to recover a debt from you. The debt collector may contact you by telephone or letter asking you to pay the money. You can:

• ask for more information about the debt
  
• check your records to see whether you are being asked to pay the right amount.

If you agree that you owe the debt, but are having difficulty making payments, you can negotiate with the creditor. You could offer:

• to pay a lesser sum, or if this is not accepted,
• to pay by instalments.

If you do not agree that you owe the debt, you can: 

• contact the creditor either by telephone or in writing to dispute the debt
• make a complaint to the Telecommunications Industry Ombudsman (TIO) if the debt relates to a phone contract
  
• make a complaint to the Energy & Water Ombudsman NSW if the debt relates to an electricity, gas or some water bills in NSW
• make a complaint to an External Dispu​te Resolution Scheme (EDR) if the creditor or debt collection agency is part of an EDR Scheme
• get help from a Financial Counsellor if you need help working out what you owe or what you could afford to pay.
  

When dealing with the debt collector you should:

• be careful not to admit the debt if you are disputing it or not sure whether you owe it
  
• only say or put things in writing that you want to rely on if the matter went to court
  
• keep copies of any letters you send and/or details of who you spoke to, when and what was said.

If you want to dispute you owe the money, you should also get legal advice. Be aware that a creditor has six years to commence legal action to recover a debt. 

For more information, see the factsheet Dealing with debt collection on the Financial Rights Legal Centre website. 

How can I use an External Dis​pute Resolution Scheme?

External Dispute Resolution (EDR) schemes are an alternative way of resolving a dispute without going to court. Credit providers and many debt collection organisations now belong to an EDR scheme.

The EDR scheme will investigate the dispute and make a decision. While the EDR scheme is dealing with your dispute, all court action and other enforcement action must stop.

The EDR Scheme will inform you whether they can deal with your matter or not. The EDR scheme can only assess a complaint within its jurisdiction and terms of reference and against one of its members.

From 1 November 2018, the Australian Financial Complaints Authority (AFCA) replaces three EDR schemes, including the Financial Ombudsman Service, the Credit and Investment Ombudsman and the Superannuation Complaints Tribunal.

To find out if a debt collector is a member of AFCA, see Find a financial firm or superannuation fund on the AFCA website.

​How do I complain​ a​​bout a debt collector?

Debt collectors must be professional and reasonable in their contact with you.

They are not allowed to:

• threaten you or other people you know or make threats to damage your property
  
• stay on your property if you refuse them permission or ask them to leave
  
• be verbally abusive or discriminatory towards you
  
• contact you at unreasonable times, for example, in the middle of the night
  
• contact you an unreasonable number of times each day or week
  
• tell other people, for example work colleagues, friends or family, about the situation unless you give them permission to
  
• make false or misleading statements about the debt, for example, that you owe more than the debt, or that a family member will have to pay your debt for you.
  

If you have a complaint against a debt collector, you can:

• write to the debt collector ab​​out their conduct - see Dealing with debt collectors: your rights & responsibilit​ies​ on the Australian Competition and Consumer Commission (ACCC) website 
  
• make a complaint to an External Dispute Resolution (EDR) Scheme, if the agency is part of an EDR S​ch​​eme
  
• make a complaint to the Australian Securities & Investments Commission (ASIC), if the debt relates to a loan
  
• make a complaint to the ACCC if the debt does not relate to a loan
  
• make a complaint to the Telecommunications Industry Ombudsman (TIO) if the debt relates to a phone contract
  
• make a complaint to the Energy & Water Ombudsman NSW (EWON) if the debt relates to electricity, gas or some water bills in NSW
  
• speak to the police if the debt collector intimidates, harasses or is violent towards you.
  

Can a debt collection a​gency add fees to collect the debt?

A debt collection agency can't ask for or collect money from you to pay for their costs in collecting the debt from you. However, you may be legally responsible to pay a creditor for fees the creditor has to pay for hiring a debt collector, but only if this arrangement was stated in your contract. You should read your contract carefully to see what it says about fees.

If a debt collection agency has said that you must pay them directly for any debt collection fees, you can make a co​mplaint about the debt collection agency.

If you have paid a debt collection agency for debt collection fees, you may be able to get these fees back. 

You should get legal advice about your situation.

What if the debt r​elates to electricity, gas or water bills?

If you have a dispute with your energy or water supplier, you can contact the supplier, explain your problem and try to work out a solution. Sometimes the supplier will outline their complaint process on their website.

If you're experiencing domestic and family violence or financial abuse, you can talk to your service provider's hardship team. Most electricity, gas, and water providers have domestic violence policies and different ways to help customers in this situation. For more information, see Electricity gas water and phone bills on the My problem is about section of our website.

If you can't resolve the dispute, you can make a complaint to the Energy and Water Ombudsman (EWON).

EWON can deal with a variety of complaints, including:

• high bills
• payment difficulties
• supply issues.
  

EWON can only deal with disputes over some water bills. You should check whether your water supplier is a member of EWON. To find out whether your water supplier is a member of EWON, see Types of member providers on the EWON website.

If your supplier is not a member of EWON, you should make a complaint about your dispute with your water supplier to the NSW Ombudsman.

It is best to make a complaint to EWON before any legal action is started against you, however, you can make a complaint at any stage of the process. After you make a complaint to EWON, they will try to settle the matter by seeing if an agreement can be reached between you and your supplier. If it can't, they can investigate the matter and make a decision. Any decision they make will be binding only on your supplier. You can choose whether or not to accept the decision.

For more information, see the Problems with Utilities guided pathway on the Ways to get help section of our website.

If your supplier has served you with a Statement of Claim, get legal advice about your situation. You should get advice within 28 days of being served with the claim.​

What if the debt relates​ to a phone contract?

If you have a dispute with your phone provider, you can follow the complaint process they have to see if you can resolve the situation. Sometimes the phone provider will outline their complaint process on their website.

If you're experiencing domestic and family violence or financial abuse, you can talk to your service provider's hardship team about the support available under their family violence policy. For more information, see Electricity gas water and phone bills on the My problem is about section of our website.

If you can't resolve the dispute, you can make a complaint to the Telecommunications Industry Ombudsman (TIO). The TIO can deal with a variety of complaints, including:

• problems with services, for example, faulty handsets and poor coverage
  
• billing mistakes
  
• debt collection for phone services.
  

It is best to make a complaint to the TIO before any legal action is started against you, however, you can make a complaint at any stage of the process. After you make a complaint to the TIO, they will try to settle the matter by seeing if an agreement can be reached between you and your phone provider. If it can't, they can investigate the matter and make a decision. Any decision they make will be binding only on your phone provider. You can choose whether or not to accept the decision.

To make a complaint, see Complaints on the TIO website.

For more information, see the Problems with Utilities Guided Pathway on the Ways to get help section of our website.

If your phone provider has served you with a Statement of Claim, get legal advice about your situation. You should get advice within 28 days of being served with the Statement of Claim. ​​

Should I see a financia​l counsellor?

A financial counsellor can help you assess your financial position and work out what you can do to manage your debts. They can:

• advocate for you in some circumstances, for example, by negotiating with the creditor on your behalf
  
• help arrange instalment plans
  
• identify other appropriate options, for example, hardship programs for electricity, gas and water suppliers.
  

You can speak to a Financial Counsellor for free, usually in your local area or over the telephone. 

For more information, see Get help on the Financial Counsellors’ Association of NSW INC website. 

To find a financial counsellor, see Find a Financial Counsellor on the National Debt Helpline website.

What can I do if I can't afford to pay my Local Council rates on time because I am in financial hardship?

If you are in financial or personal hardship, you should contact your council as soon as possible to find out about their hardship policy. Your council should follow the guidelines issued by the Office of Local Government. For more information, see Debt Management and Hardship Guidelines on the Office of Local Government website.

Your council may have a form for you to fill out, or they may ask you to put your hardship request in writing. 

Your council may:

• agree to a payment plan
  
• cancel the interest on the overdue rates and charges
  
• put on hold all or some of your rates and charges for some time.

For more information, see the Unpaid Council Rates Guided Pathway on the Ways to get help section of our website.

If your council doesn't have a hardship policy or won't negotiate with you, contact the NSW Ombudsman. For more information, see the factsheet Having trouble with your rates and charges? on the NSW Ombudsman website. 

Do I have to pay for an ambulance?

If you need emergency ambulance treatment and/or transport, you may have to pay a fee for this service. 

You may not have to pay for an ambulance if you are:

• a pensioner or concession card holder
  
• a child in the care of the state
  
• a victim of sexual assault, domestic violence or child abuse
  
• being taken involuntarily to a declared mental health facility. 
  

For more information, see Exemptions from NSW Ambulance Fees on the NSW Ambulance website. 

Your ambulance fees may be paid for you if you are covered by:

• private medical insurance
  
• a school or group contribution 
  
• workers compensation, motor accident or third party (CTP) insurance
  
• the Lifetime Care and Support Authority. 

For more information, see Accounts & Fees on the NSW Ambulance website.

Can I apply to have my ambulance fee reviewed?

If you have received an invoice for a NSW ambulance fee and are having difficulty paying or dispute the charge, you can apply to have the fee reviewed. 

To do this, you must complete an application form and send it to NSW Ambulance, with your supporting documents, before the due date on the invoice. 

NSW Ambulance does not have to accept any application received more than seven days after the due date.  

NSW Ambulance will notify you of the outcome of your application within 42 days of receiving your application. 

They may decide to:

• confirm the fee 
  
• waive the fee
  
• reduce the fee
  
• provide an extension to pay the fee
  
• agree to an instalment plan
  
• revoke the decision to charge a fee. This will occur where the person charged is exempt, the wrong person was charged, or the amount charged was incorrect. 
  

For more information, see Financial hardship and fee review on the NSW Ambulance website. 

When will NSW Ambulance waive or reduce their fee?

Your fee may be waived, or an alternate payment may be agreed to, if:

• you are experiencing financial or non-financial hardship
  
• at the time you received the service you had applied for, but not yet received, a concession card
  
• you are a refugee or good Samaritan 
  
• the service was provided to a child or young person who was involved in an accident and incident, and that child or young person’s parent(s) died in the accident or incident
  
• the service was provided to a child or young person who died in an accident or incident. 

How do I respond to a letter of demand?

If you have received a letter of demand you can:

• ask for more information
• deny you owe the money
  
• negotiate with the creditor, including offering to pay a lesser amount or an amount by instalments
  
• dispute the amount
  
• agree you owe some or all of the money.
  

If you do nothing, and do not respond to the letter of demand, the creditor may consider taking legal action against you to recover the money. For debts over $1,000, interest may also be added, which means the debt can increase with time. Don't ignore a letter of demand.

For more information, see Step by step guide - Responding to a letter of demand on the My problem is about section of our website. 

Is the creditor legally required to send a letter of demand?

There is generally no legal requirement that says a creditor must send a letter of demand, but it is usually the first step before court action.

Can I negotiate with ​the creditor after a letter of demand?

If you have received a letter of demand, you may want to negotiate with the creditor if you:

• agree you owe the debt but want to pay it in instalments
  
• agree you owe the debt but cannot pay by the timeframe given to you 
  
• think you owe a different amount to what the creditor is seeking from you.
  

If you need help negotiating with the creditor you can try mediation through a Community Justice Centre (CJC). 

To find your closest CJC, see the CJC website.

You can also speak to a Financial Counsellor about your situation, particularly if you are considering paying the debt off in instalments, or if you need help with your financial situation.

To find a financial counsellor, see Find a Financial Counsellor on the National Debt Helpline website.​

For more information, see Resolving your dispute on the My problem is about section of our website.

Can I get more infor​mation about the debt in the letter of demand?

If you do not have enough information to decide whether you owe the money or not, you could write to the creditor to ask for more information. You can ask for:

• a copy of your original contract
  
• a detailed statement, or
  
• itemisation of the money owed.
  

This is called asking for further and better particulars.

If you write to the creditor, you should only include in your letter information you want to rely on if the matter went to court. It is best not to admit you owe the debt if you aren't sure whether or not you owe it, or if you may have any grounds to dispute it.​

For more information about debt, including a sample letter to ask for further and better particulars, see Step by step guide - Responding to a letter of demand on the My problem is about section of our website. 

What if I dispute I owe​ the money?

If you have received a letter of demand and you dispute that you owe the money, you can write a letter to the creditor explaining the reasons why you believe you do not owe the money. For example, you could explain that the accident was not your fault, that the debt has been fully repaid or that the debt is not yours.

You should only put things in your letter that you want to rely on if the matter had to go to court. You can also write the words 'WITHOUT PREJUDICE' in capital letters at the top of any letter you write to the creditor. This can make it less likely for anything you have said in the letter to be used against you if you end up at court. 

For more information, including sample letter responding to a letter of demand, see Step by step guide - Responding to a letter of demand on the My problem is about section of our website. 

What if I agree I owe the​ debt?

If you agree you owe the amount claimed in a letter of demand, you can:

• pay it in full to the creditor, or
  
• negotiate to pay a lesser sum or to pay the debt in instalments, if you can't afford to pay the debt in full.
  

If you come to an agreement with the creditor about paying the debt you should put the agreement in writing. This will help avoid future disputes about the terms of your agreement.

For more information, see Put your agreement in writing in Resolving your dispute on the My problem is about section of our website.

If you pay the amount in full you can put in the agreement that payment is in full and final settlement of the debt.

 It is a good idea to get legal advice before signing any agreement given to you. You should also keep receipts or proof of any money you pay towards the debt.​

What can I do if I can't affo​​rd to pay the amount in the letter of demand?

If you agree you owe the debt but cannot afford to pay it, you can negotiate with the creditor. You can do this over the telephone or in writing. You could:

• offer to pay by instalments
• offer a reduced lump sum to finalise the debt
• ask the creditor to write off the debt, or
• ask for more time to pay.

You may have additional options if your debt relates to a phone contract.

When you negotiate with the creditor, it might be helpful to explain your financial situation so that they can see you can't afford to pay the debt in full. If you write to the creditor to negotiate payment, you could include information about:

• any income you have, for example, what you earn, or what benefits you receive from Centrelink
• any other expenses, for example, loans, debts and ongoing commitments
• your family circumstances, and
• any other circumstances which can show why you may find it difficult to pay the debt.

If you send the creditor a letter, you should keep a copy for your own records.

If you and the creditor reach an agreement about paying the debt, you should get the agreement in writing.​

For more information, see Negotiation in Resolving your dispute on the My problem is about section of our website.

How do I know if it's a lett​er of demand?

A letter of demand is often sent by a creditor (or their solicitor or debt collector) if a debt is not paid by the due date. The letter will usually, but not always, state:

• how much money is owed
• why it is owed
• when it should have been paid
• that legal action may be started if the debt remains unpaid and any court costs and interest will be added to the debt.
  

If you are not sure whether the document you have received is a letter of demand or a court document, you should get legal advice. 

Is a letter of demand different from a Statement of Claim?

A letter of demand is different from a Statement of Claim. A Statement of Claim is a court document that is used by a creditor to start legal action because of a debt that is owed to them. A Statement of Claim:

• is filed with the court - it will have the Court stamp on it
• will list the court registry's details on it and have a case number
• outlines who the plaintiff (creditor) and defendant (debtor) is
• explains what the claim is for  
• specifies the amount of money being claimed in the 'Relief claimed' section of the form, and
• states that you have 28 days to respond to the Statement of Claim.

​If you are not sure whether the document you have received is a letter of demand or a Statement of Claim, you should get legal advice. 

What if the creditor a​nd I reach an agreement?

If no legal action has been started and you reach an agreement with the creditor about the debt, you should get the agreement in writing. The agreement should include details such as:

• how much you have agreed to pay
• the amount and frequency of any instalments
• date and time of payments
• any start date for the arrangement
• the length of the agreement, for example, if instalments are to continue for 12 months or until the debt is paid out.

The agreement should reflect the arrangement you have made. The arrangement should be something you can afford or stick to. 

In some situations, it might be helpful to speak to a free financial counsellor. They can often help you to work out what you reasonably can afford to pay towards a debt. To find a financial counsellor, see Find a financial Counsellor on the National Debt Helpline website.

If the agreement is that you pay the full amount, or a lesser amount to satisfy the debt, you should ensure the agreement says that payment is in "full and final settlement of the claim". This aims to protect you from the creditor taking further legal action to recover the debt.

For more information, see Put your agreement in writing in Resolving your dispute on the My problem is about section of our website. 

If you need help writing an agreement, or if you are given an agreement to sign, you should get legal advice.

What is a Statement​ of Claim?​

A Statement of Claim is a Court document that is used by a creditor to start legal action to recover a debt owed to them. A Statement of Claim:

• is filed with the Court, and it will have the Court stamp on it​
• will list the court registry's details on it and have a case number​
• outlines who the plaintiff (creditor) and defendant (debtor) is​
• explains what the claim is for​
• states the amount of money being claimed in the 'Relief claimed' section of the form, and​
• tells you that if you don't respond, the creditor can apply for default judgment against you after 28 days of you being served with the claim.​

There are rules about how a Statement of Claim must be served.​

How does a Statement of Cla​im have to be served?​

There are strict rules about how a Statement of Claim must be served. These rules vary depending on whether you (as defendant) are:

• an individual (and whether you have legal capacity)
• an unregistered or registered business
• a company or partnership.

A Statement of Claim must be served on you within six months of the date it is filed with the court.

There are strict rules about service of documents if you are considered not to have legal capacity, such as where you are under 18 or you can't manage your own affairs because of a disability.

For more information, see Step by step guide – Serving the Statement of Claim on the My problem is about section of our website.

If you think service wasn't carried out correctly, you should get legal advice.

How do I respond to a​ Statement of Claim?

If a creditor believes you owe money and have not paid, they may start court action against you by filing a Statement of Claim. If you receive a Statement of Claim, you can:

• negotiate with the plaintiff​
• request more information​
• defend the claim​
• make a cross claim​
• agree you owe the amount in the claim
• go to external dispute resolution.​

If you do nothing and don't respond to the Statement of Claim, the plaintiff can apply for default judgment against you after 28 days of you being served with the Statement of Claim.

For more information, see Responding to a Statement of Claim on the My problem is about section of our website.

If you need help to respond to a Statement of Claim, you should get legal advice.

I noticed there is a mistake with the spelling of my name in the Statement of Claim. Do I still have to respond?​

Yes. You should respond to a Statement of Claim within 28 days even if you notice a mistake with your name.

If your name is completely wrong and you believe that the plaintiff has started a claim against the wrong person, you may have to file a Defence. You should get legal advice.

Can I apply to the Local Court to extend the 28 day time limit to respond to a Statement of Claim?

The time limit to respond to a Statement of Claim is 28 calendar days after you were served with the claim. It is not possible to extend this time limit.

If it has been more than 28 calendar days since you were served with a Statement of Claim, you should telephone the Local Court to find out if a default judgment has been filed against you. If the creditor has not filed for default judgment, you can file a Defence or Cross Claim. If the creditor has filed for default judgment, you should get legal advice about your options.

For more information, see Responding to a Statement of Claimon the My problem is about section of our website.

If you were served with a Statement of Claim over 28 days ago, you should get urgent legal advice.

What if I have been ​served with an amended Statement of Claim?

If you have been served with an amended Statement of Claim, you will have a certain amount of time to respond to the amended claim.

If you had already filed a Defence before getting the amended claim, you can file an Amended Defence within 14 days of being served with the Amended Statement of Claim.

If you did not file a Defence before getting the amended claim, the creditor can apply for default judgment if you do not respond to the Amended Statement of Claim within 28 days of being served.

For more information, see Changing your defence in Defending the claim on the My problem is about section of our website.

If you aren't sure whether to amend your Defence or not, or how to respond to an Amended Statement of Claim, you should get legal advice.

Can I negotiate with the ​creditor after getting a Statement of Claim?

After you have been served with a Statement of Claim, you can negotiate with the creditor. You can do this over the telephone or in writing. Your negotiations could be about:

• whether or not you are responsible for the debt, and/or​
• how much you will pay, and any arrangements for paying the debt.​

If you are disputing the debt and you want to negotiate with the creditor, you should be careful to not say or write anything that admits or accepts your responsibility for the debt.

You have certain options if you and the creditor are able to reach an agreement.

Although you can negotiate with the creditor after getting a Statement of Claim, you should be aware that if you don't respond to the Statement of Claim or file anything with the court within 28 days of being served, the creditor can apply for default judgment against you.

For more information, see Settling your case on the My problem is about section of our website.

What if the creditor and I​ reach an agreement after I have received a Statement of Claim?

If you have been served with a Statement of Claim and you reach an agreement with the creditor about the debt, and there is no judgment in place, you can:

• file a Notice of Discontinuance (Form 33) with the relevant Court. This will stop the case and no order will be made against you. The form needs to be signed by both you and the creditor.​
• ask for the matter to be discontinued on your next court date - you would have to explain to the court that you and the creditor have reached an agreement about the debt​
• put your agreement with the creditor into consent orders by filing a Consent Judgment (Form 44) with the relevant Court. Your agreement will become an order of the Court and can be enforced.​

For copies of the forms, see Civil forms on the Uniform Civil Procedure Rules Forms website.

You should get legal advice about your situation and about which option is best in your circumstances.​

All relevant parties must be notified of an agreement before entering into a consent judgment.

If nothing is filed with the Court after you have received a Statement of Claim, but your matter has settled by agreement, the proceedings may be automatically dismissed once nine months has passed since the Statement of Claim was filed with the Court.

For more information, see Settling your case on the My problem is about section of our website.

What if we negotiate after I get t​he Statement of Claim but we can't agree?​

If you negotiate with the creditor but can't reach an agreement you should consider your options in responding to the Statement of Claim.

If you don't respond to the Statement of Claim within 28 days of being served, the creditor can apply for default judgment against you. This means that a Court order can be made against you saying you owe the money.

For more information, see Responding to a Statement of Claimon the My problem is abou section of our website.

Can I ask for more informa​tion about the debt after getting a Statement of Claim?

If you need further details about the claim, to work out if you owe the money or how much you owe, you can ask for more information from the plaintiff. You could send them a letter asking a series of questions about the claim. This process is called asking for further and better particulars. You can also ask in your letter that they do not apply for default judgment until a period of time after you receive their response.

If you do not get a reply to your letter, you will still need to decide how to respond to the Statement of Claim within 28 days of being served.

If you don't have enough information to decide how to respond to the claim, you should get legal advice. This is important because if you don't file a Defence or response to the Statement of Claim, the plaintiff can apply for default judgment against you after 28 days of you being served with the claim.​

For more information about asking for further and better particulars and sample letters, see Asking for more information in Responding to a claim on the My problem is about section of this website.

Can a creditor claim inter​est?

The creditor can claim interest on the debt in the Statement of Claim but only if the amount of the claim is more than $1,000. The interest can be claimed from the time the debt became due until the date of judgment.

If there was no contractual interest rate (a rate that was specified in an agreement between you and the creditor) a statutory rate is set by the Uniform Civil Procedure Rules.

The interest rate usually changes on 1 January and 1 July each year. You can check the current interest rates by speaking to court staff or checking Interest rates on the Local Court website.

For more information, see Step by step guide - Working out pre-judgment interest on the My problem is about section of our website.

In addition to pre-judgment interest, if the plaintiff gets judgment against you, they can claim post-judgment interest. This type of interest is added if you don't pay the debt within 28 days, unless the judgment states otherwise.​

What if I agree that I owe the a​mount in the claim?​

If you agree you owe the amount in the claim and there is no default judgment against you, you can:

• negotiate with the creditor to see if you can reach an agreement about paying the debt
• pay the plaintiff the amount in full, including the fees, costs and interest. If you do this, you should complete a Notice of Payment (Form 34) and file it with the Court. Filing this form means that there will be no judgment recorded against you and the proceedings will be stayed (stopped).
• file an Acknowledgment of Liquidated Claim (Form 35) with the Court. This form tells the Court that you agree you owe the money and recor​​ds a judgment against you. If you cannot afford to pay the debt in full you can also file a Notice of Motion to pay by instalments (Form 46 or 47).​

You will need to file the form at the same Local Court where the Statement of Claim was filed, unless your matter has been transferred to a different court, or online using the NSW Online Registry.

For copies of the forms, see Civil forms on the Uniform Civil Procedure Rules Forms website.

If you do nothing, the creditor​ can apply for default judgment against you after 28 days of you being served with the Statement of Claim. This means that the Court will formally record that you owe the money and the debt can be enforced against you.

If I want to pay the full amount i​n the claim, do I pay the Court?

If you want to pay the full amount in the Statement of Claim, including the fees, costs and interest, and there is no judgment against you, you should pay the money to the plaintiff.

You can also complete a Notice of Payment (Form 34) and file it at the same Local Court where the Statement of Claim was filed unless your matter has been transferred to a different court or the Court has ordered you to file documents at a different court, or online using the NSW Online Registry.

Filing this form means that there will be no judgment recorded against you and the proceedings will be stayed (stopped).

For a copy of the form, see Civil forms on the Uniform Civil Procedure Rules Forms website.

Can I apply to pay in instalment​s if I only owe part of the claim?

If you owe part of the debt in the Statement of Claim but not the full amount in the claim, you can't simply apply to pay the portion you owe in instalments. Your options include:

• negotiating with the creditor to see if you can reach an agreement about the debt, or​
• filing a Defence to dispute the part of the debt that you don't owe. If you decide to defend the claim, you should file a Defence (Form 7A or 7B) within 28 days of being served with the Statement of Claim. You must file the Defence at the same court where the Statement of Claim was filed.​

For a copy of the form, see Civil forms on the Uniform Civil Procedure Rules Forms website.

What if I disagree that I owe the am​ount in the claim?

If you disagree you owe the debt, you can defend the claim. You can do this if you:

• don't believe you owe all or part of the money
• don't believe the amount being claimed is correct
• have some other reason why you don't believe you should have to pay the debt.

To dispute the claim, you need to ​file a Defence (Form 7A or 7B) within 28 days of being served with the Statement of Claim. You must file the Defence at the same court where the Statement of Claim was filed.

For a copy of the form, see Civil forms on the Uniform Civil Procedure Rules Forms website.

For more information, see Step by step guide - Filing a defence on the My problem is about section of our website.

If you want to defend the claim, you should get legal advice.

What if the creditor also owes m​e money?

If you have been served with a Statement of Claim, but you believe the creditor owes you money, you can consider filing a Cross Claim (Form 9). You have 28 days from being served with the Statement of Claim to do this.

If you dispute the plaintiff's claim you will also need to file a Defence (Form 7A or 7B). You should file these forms at the same court where the Statement of Claim was filed.

For a copy of the forms, see Civil forms on the Uniform Civil Procedure Rules Forms website.

For more information, see Cross-claims in Defending the claim on the My problem is about section of our website.

If you aren't sure whether you have grounds for a Cross Claim, get legal advice.

What is a Cross Cl​aim?

A Cross Claim is a claim you can make in response to a Statement of Claim if you believe the plaintiff or a third party owes you money.

You can't file a Cross Claim if a default judgment has already been made against you (unless you get the judgment set aside).

​For more information, see Cross-claims in Defending the claim on the My problem is about section of our website.

Who can help me fill out m​y Defence or Cross Claim form?​

If you need help filling out your form(s), you should get legal advice. What you put in your forms can affect your case, so it is important to ensure your forms are completed correctly.

If the debt is a small claim (under $20,000), see Defending the claim on the My problem is about section of our website.

If the debt is over $20,000 it is best to get a lawyer to help you draft your Defence and/or Cross Claim.

Do I need to file my ​evidence at the time I file my Defence?

If you decide to defend the claim, you should file your Defence (Form 7A or 7B) within 28 days of being served with the statement of claim. You do not need to attach your evidence to the form.

After the Court receives your Defence, it will arrange a date and time for you to attend court. Usually, you will be given directions about when to file your evidence with the Court and when to exchange evidence with the plaintiff.​

For a copy of the form, see Civil forms on the Uniform Civil Procedure Rules Forms website.

What happens if I defend the c​laim?

If you decide to defend the claim, the Court will follow a process that involves a hearing. The process varies depending on which court and division your claim is heard:

• in the Small Claims Division of the Local Court the process involves a Pre-Trial Review and hearing​
• in the General Division of the Local Court the process involves a call over and hearing.​

If your matter is being heard in the District Court or Supreme Court of New South Wales, you should get legal advice about the court process.

I am the second defendant. The first defendant wants to file a Defence. Do I also have to file a Defence if I agree with the first defendant?​

Each defendant should respond to a Statement of Claim within 28 days of being served.

There are different ways you can respond to a Statement of Claim.

For more information, see Responding to a Statement of Claim on the My problem is about section of our website.

If you do not respond to the Statement of Claim within 28 days, the plaintiff may get a default judgment against you without you attending court or being notified. The default judgment can then be enforced. Having a judgment against you may also affect your credit rating.

Before filing a Defence, you should get legal advice.

What happens at a pre-​trial review?

Once a Defence and/or Cross Claim has been filed in the Small Claims Division of the Local Court, the matter is listed for a pre-trial review. Pre-trial review is usually held by a Registrar or Assessor, although in some cases it can be held by a Magistrate.

Pre-trial reviews in Small Claims Division matters are heard remotely unless an application has been made to, and granted by, the Court to allow an in-person appearance.

At the pre-trial review you will have the opportunity to clarify any issues in dispute and to negotiate an agreement with the plaintiff.

For more information, see Pre-trial review on the My problem is about section of our website.

What if I don't attend the pre-t​rial review?​

Pre-trial reviews in Small Claims Division matters are heard remotely unless an application has been made to, and granted by, the Court to allow an in-person appearance.

If you don't attend the pre-trial review the Court can make a decision about the matter without you being there. This means that the Court can enter judgment against you, and make an order that you have to pay the plaintiff's legal costs.​

How do I prepare witness statements for my small claims hearing?​​

Usually, witnesses do not need to attend court to give evidence in the Small Claims Division of the Local Court. Their evidence will be given in the form of a written witness statement, unless the Court has ordered them to attend.

The Court may have directed you to file written witness statements and to provide the other party with a copy at least 14 days before the date of the hearing. Witness statements can include your own written statement, as well as anyone else who can provide a statement to support your case.

For more information about preparing witness statements, see Preparing for the hearing in The Hearing on the My problem is about section of our website.

In some circumstances you can use the Affidavit form, however the rules for affidavits are more formal.

If you do not know whether you should file an Affidavit or a Witness Statement, you should get legal advice. Remember, the evidence in your Witness' Statement(s) can affect the outcome of your case.

If you are not sure what to include in a witness statement you should get legal advice.​

I want to appear in person in the Small Claims Division of the Local Court. What can I do?​

If you want to appear in person for the hearing you will need to email the registry at least five days before the date of the hearing. Your email should explain the reasons why you can’t attend remotely and seek leave to appear in person.

It is up to the Court to decide whether to grant your application.

What happens at a heari​ng in the General Division of the Local Court?

If you file a Defence and/or Cross Claim in the General Division of the Local Court, you will be sent a notice with the date, time and location for a call over, usually within six weeks. Call overs are usually dealt with remotely.

At the call over, the Court may set a review date and give you directions about when you must file and exchange your evidence. You will usually have to do this at least four weeks before the review date. At the call over, the Court can also refer you to mediation. In some cases, the Court may hold a second directions hearing, when they fix a review date and give further directions.

At the review date, you and the plaintiff must attend remotely and file a written summary of your case. You should get legal advice about this as the summary needs to include any relevant legal arguments and references. The Court will also check that the directions have been followed, and if they haven't, the Court may dismiss a claim, strike out a Defence and/or make cost orders.

After the review date, there will usually be a trial, a hearing where you and the plaintiff can present your case, and have witnesses attend to give evidence. General Division final hearings will be held in person unless an application has been made to, and granted by, the Court to allow a remote appearance.

Are proceedings in the Local Court held in person or remotely?

Small Claims Division matters will be heard remotely unless an application has been made to, and granted by, the Court to allow an in-person appearance.

General Division final hearings will be held in person unless an application has been made to, and granted by, the Court allow a remote appearance.

Can my matter be transferre​d to NSW Civil and Administrative Tribunal?

If Court action has been started against you in the Local Court for recovery of a debt, and the dispute relates to goods or services purchased from a trader, or a consumer law issue such as a dispute with a builder, you may be able to ask for the case to be transferred to the NSW Civil and Administrative Tribunal.

How and when you ask for this will depend on where your case is up to. If you are not sure what to do, you should get legal advice about your situation. ​

Can I have my case moved to ano​ther Local Court?

In some circumstances, you might be able to ask the Court to move your case to another courthouse in NSW. This is called asking for a change of venue. You usually won't be able to change where your case is being heard if you want to move it within 100km of where the claim was first filed unless there are special circumstances.

If you ask the Court for a change of venue, the Court will consider:

• where you and the other party live (now and at the time the debt arose)​
• where you or the other party operate a business (now and at the time the debt arose)​
• where the cause of action arose, for example, where the debt was taken out, or where the contract was entered into
• any special needs you have.​

For more information about changing the venue, see Step by step guide - Moving the case on the My problem is about section of our website.

Can my case be transferred from the Small Claims Division to the General Divisison?

Court cases that are started in the Small Claims Division can be transferred to the General Division if:

• the issues in the case are complex, difficult or of such importance that it is more appropriate for the case to be decided in the General Division, or
• there is a cross-claim for more than $20,000.

Cases can be transferred from the General Division to the Small Claims Division if:

• any complex, difficult or important issues have been resolved (either completely or partly), or
• it is appropriate to do so.​

Can I have my case moved to a court in another state?​

You can't apply to move your case to a Court in another state. There are circumstances where you can apply to have proceedings stayed (stopped) under the Service and Execution of Process Act 1992(Cth), because the case was commenced in the wrong state.

If you want your case moved to another state or stayed, you should get legal advice.

Can someone else speak o​n my behalf?​

If you need an interpreter, you will need to arrange this yourself and pay any costs.

If you want someone other than a lawyer to represent you, you can ask the Court about this and explain your reasons. Usually, it is uncommon for a court to give permission for someone else to speak on your behalf if they are not a lawyer.

If you lack capacity to represent yourself or instruct a lawyer, another adult can apply to the Court to run the case on your behalf as your 'tutor 'or 'next friend'. The tutor must be represented by a lawyer unless the court orders otherwise.​

If you have a matter in the Supreme Court of NSW, District Court or Federal Court of Australia, you should get a lawyer to represent you.​

Will the court arrange an interpr​eter for me?

In civil cases, such as debt cases, you need to arrange and pay for an interpreter yourself.​​

If a lawyer helped me, what legal costs can be awarded in the Small Claims Division?​

In the Small Claims Division of the Local Court there is a limit on the amount of legal costs that can be awarded. The amount can vary depending on:

• the total amount of the claim that the lawyer has assisted with​
• what happened during the proceedings.​

If the lawyer helped you and the proceedings ended without the Court giving a judgment after a hearing, the maximum amount of legal costs that can be awarded are as follows (including the preparation costs for the claim):​

Amount of claim	Maximum costs (excluding GST)
$1,000 or less	$364.80
Over $1,000 but less than $5,000	$547.20
Over $5,000 but less than $20,000	$729.60

If the lawyer helped you and the proceedings ended with the Court deciding on your matter after a hearing, the maximum amount of legal costs that can be awarded are as follows (including the preparation costs for the claim):

Amount of claim​	Maximum costs (excluding GST)
$1,000 or less	$629.60
Over $1,000 but less than $5,000	$944.40
Over $5,000 but less than $20,000	$1,259.20

If you, or the plaintiff, do not accept a genuine offer to settle a dispute and the refusal was not reasonable, the Court can increase the maximum amount of legal costs for giving a judgment after a hearing by 25 percent.

For more information, see What can they claim? in Responding to a Statement of Claim on the My problem is about section of our website.

How much will a lawyer c​harge me?

There is no set amount a lawyer can charge you. The costs can vary and are unregulated. You should speak to a lawyer about their charges. In certain circumstances they must disclose their costs upfront.

For more information about cost disclosure, see D​ealing with my lawyer on the My problem is about section of our website.

If you take court action, legal costs may be awarded in certain circumstances, for example, if you are successful with your case. These costs are capped in the Small Claims Division.​

How do I know if there is a jud​​gment against me?

You can contact the Court where the claim was filed to find out if there is a judgment against you.

If you didn't respond to a Statement of Claim, the plaintiff can apply to the Court for default judgment after 28 days of you being served with the claim.​

What can I do if I want t​o pay the judgment amount in full?

If there is a judgment against you, it can be enforced immediately and interest can be added if you don't pay the full amount within 28 days of the judgment being made. If you want to pay the full judgment amount, including any fees, interest and costs, you can pay the money directly to the plaintiff.

You should send a receipt to the plaintiff and ask for written confirmation that they have received the judgment in full.

You should also keep a record or receipt in case there is a dispute.

You do not need to tell the Court.

For more information, see Paying the judgment debt in After court on the My problem is about section of our website.

What if I can't afford to pay the full amount in the judgment?

If a judgment has been made against you but you can't afford to pay it in full, you can:

• negotiate with the creditor about paying the debt in instalments - this may help to avoid enforcement costs. For more information, see Negotiating after judgment in After court on the My problem is about section of our website.
  

• apply to the court to pay by instalments by completing a Notice of Motion to Pay by Instalments (Form 46 or 47) and file it at the same Local Court where the Statement of Claim was filed, or online using the NSW Online Registry.
  

For a copy of the form, see Civil forms on the Uniform Civil Procedure Rules Forms website.

For more information, see Paying by instalments after judgment in After court on the My problem is about section of our website.

If you reach an agreement with the creditor about paying the judgment, you should get legal advice about your options to ensure that the agreement will stop court action against you.​

How do I apply to pay by instal​ments?

If you want to apply to pay the judgment in instalments you can file a Notice of Motion to Pay by Instalments (Form 46 or 47). In your form you will need to:

• specify an amount that you can afford to pay in instalments and explain how often you want to pay it
  
• complete the Financial Statement at the back of the form - you will need to enter your income, assets and expenses. This information should support that the offer you make is reasonable based on your circumstances.
  

For a copy of the form, see Civil forms on the Uniform Civil Procedure Rules Forms website.

You will need to file the form at the same Local Court where the Statement of Claim was filed, or online using the NSW Online Registry.

If you need help to work out what you can afford to pay you should speak to a Financial Counsellor. To find a financial counsellor, see Find a Financial Counsellor on the National Debt Helpline website.

The Court can refuse y​our application if it thinks you can afford more than what you have offered. The Court can also refuse your application if it thinks you cannot afford what you have offered.

For more information, see Paying by instalments after judgment in After court on the My problem is about section of our website.

If I apply to pay by instalme​nts, will enforcement action against me stop?

Your first instalment application will automatically stay (stop) any enforcement action against you, for example, the sheriff seizing property from your home or a garnishee order made against your wage or salary. 

The enforcement action is usually stayed up until your application is decided by the Court, and if your application is approved.

For any subsequent applications, you will need to apply for Stay of Proceedings if you want enforcement action stopped until your application is decided.

If your application to pay by instalments is refused, the creditor can take enforcement action against you.​

Can the creditor dispute ​my instalment application?

If your instalment application is accepted by the court, the creditor will be notified. The creditor has 14 days to file an objection if they are disputing your application.

If an objection is filed by the creditor, a hearing will be held.

For more information, see Paying by instalments after judgment in After court on the My problem is about section of our website.       

If you receive a notice telling you to attend a hearing about the creditor's objection to your instalment application, you should get legal advice.​

What if my instalment ap​plication is refused?

If the Court refuses your instalment application, you can:

• file an objection to the refusal within 14 days
• file a fresh instalment application with a better offer. This fresh application will not stay (stop) enforcement action. You may need to apply for a stay of enforcement.
  

You should get legal advice about these options. ​

What if I miss a paym​e​nt?

If your instalment application was approved by the Court and you miss a payment, the creditor can take enforcement action against you. Interest can also be added to the judgment amount. 

You should get legal advice about your situation. ​

How are payments made​ if an instalment application is approved?

If the Court approved your application to pay by instalments, you must make payments directly to the creditor - not to the Court. You should keep receipts or records of payments in case there is a dispute. You do not need to tell the Court about your payments.

If a garnishee order was made against your wages before you applied to pay by instalments and your application to pay by instalments has been approved by the Court (and there was no objection by the creditor), your employer will be responsible for making the instalment payments directly from your wage/salary.​

What can I do if my financial circumstances have changed and I cannot afford to pay the instalment order?

If your financial circumstances have changed or you cannot afford to pay according to the instalment order, you can apply for a new instalment order. The process to apply for a new instalment order is the same as the first application.

If the Court makes another instalment order, it replaces the first one.

For more information, see Paying by instalments after judgment in After court on the My problem is about section of our website.

What can I do if I have just fo​und out about a judgment against me?

If you discover a default judgment has been made against you and you want to dispute the claim, you can apply to the Local Court to set aside the default judgment. 

You should get legal advice if you are in this situation.

For more information, see Step by step guide - Setting aside a default judgment on the My problem is about section of our website. 

I have been refused a loan because of a court judgment against me. What can I do to remove the judgment on my credit report?

It is not always easy to remove a court judgment against you. There are a number of different options depending on your circumstances:

• if the judgment creditor agrees that the judgment should be removed from the court record, you can file consent orders in court to dismiss the judgment against you. Both you and the judgment creditor must sign the consent order form. You should get legal advice about how to draft the orders you are seeking 
  
• if the judgment is a default judgment, in certain circumstances you can apply to set it aside
  
• if the judgment is not a default judgment and you are still within time you can appeal the decision, but you will need legal advice about your case.
  

You can't file a Notice of Discontinuance (Form 33) to remove a judgment made against you.

Will a judgment be on my​ credit report?

A judgment against you will be listed on your credit report and will be deleted after five years. You can obtain a copy of your credit report by contacting one of the credit reporting companies.

For more information about credit reporting, see Your credit report on the Financial Rights Legal Centre website.

What happens if I don't pay the​ judgment?

If you do not pay the judgment debt the plaintiff can take further steps to enforce the judgment. They can:

• send you an examination notice
  
• apply for an examination order
  
• apply for a garnishee order on your wages or salary, your bank account or on a third party who owes you money
  
• apply for a writ for the levy of property to get the sheriff to seize propert​y to pay the judgment, or
• apply for you to​ be declared bankrupt, if the judgment is over $10,000.

There may be court fe​es associated with some of these proceedings. You can check these with the relevant Court. The creditor is entitled to recover these fees from you - this means that the fees will be added to the judgment debt.

Interest is also payable on the judgment debt if it's not paid within the date for payment, usually 28 days unless stated otherwise.

If you were not aware of court action against you or you have a good reason for not responding to the Statement of Claim and you dispute the judgment, you should get legal advice about whether you may be able to apply for the judgment to be set aside.​

For more information, see If you don’t pay in After court on the My problem is about section of our website.

What is an examination n​otice?

The creditor can send you an examination notice asking you to answer questions about your financial situation. If you fail to provide answers to their questions, or don't provide sufficient information, the plaintiff can apply to the court for an examination order.

For more information, see Responding to an examination notice and examination order in Responding to enforcement on the My problem is about section of our website.

What is an exami​nation order?

An examination order requires you to:

• attend court to answer questions about your financial situation
• take specific documents with you to court, such as bank statements, pay slips, tax returns, car registration and bills. 

If you don't attend court, the creditor can apply to the court for an order to have you arrested and brought before the court to be questioned about your financial circumstances.

For more information, see Responding to an examination notice and examination order in Responding to enforcement on the My problem is about section of our website.

Can a sheriff seize my p​roperty?

If you haven't paid a judgment debt, the creditor can apply for a writ for the levy of property, an order that allows a sheriff to come to your house to seize goods so that they can sell them to satisfy your debt. 

If you were not aware of court action against you or you have a good reason for not responding to the Statement of Claim, and you dispute the claim, you should get legal advice about whether you may be able to have the judgment set aside.

To avoid the sheriff seizing your property you can:

• apply to the court for a stay of enforcement
• apply to have the default judgment set aside
• apply to pay by instalments, or 
  
• pay the debt in full (to the sheriff).
  

Payment can be made to the sheriff at any time, even after goods have been seized provided they have not been sold.

There are rules around how property is seized, and what the sheriff can or can't take.

For more information, see Responding to a writ for the levy of property in Responding to enforcement on the My problem is about section of our website.

Is there a time limit for e​nforcing a judgment?

A judgment debt may be enforced up to 12 years after the date of the judgment.

If it has been longer than 12 years since judgment was made, the Court has to give permission to a creditor to enforce the judgment out of time.​

Can I appeal a decision of the​ Local Court?

You can appeal a decision of the Small Claims Division of the Local Court to the District Court, but only if:

• there has been a denial of natural justice, for example a party not being given a fair chance to present their case, or
• based on a lack of jurisdiction - that is, the Local Court did not have the power to determine the case.

Appeals from the General Division of the Local Court are made to the Supreme Court but can only be made on limited grounds.

The time limit to appeal is 28 days from the date of judgment. 

If you want to appeal a Local Court, District Court or Supreme Court decision, you will need to get legal advice.​

Is enforcement action stayed automatically if I apply to set aside default judgment?

No. The court does not automatically order a stay of enforcement when considering an application to set aside default judgment.

When you apply to set aside the default judgment, you must also apply for a stay of enforcement of the judgment. A stay of enforcement is an order stopping the plaintiff from enforcing the judgment until your application to set aside the default judgment has been dealt with by the court.

If the court orders a stay of enforcement, enforcement action will be stayed.

For more information, see Step by step guide - Stay of enforcement on the My problem is about section of our website.

If you are unsure how to apply for a stay of enforcement, or whether the court has ordered a stay of enforcement, you should get legal advice.

What is a garnishe​e order?

A garnishee order is a court order that allows money to be taken from your:

• wage or salary
• bank account, or
• a third party who is due to pay you money.

The amount taken is to pay the judgment against you.

If you are disputing the judgment and a garnishee order is in place you should get legal advice. 

Can my wages be gar​nished?

If you do not pay a judgment debt, the plaintiff can apply to the Court for a garnishee order on your wage or salary. This means that they can get an order that will force your employer to take money from your wage or salary to pay off the judgment. Your employer must leave you with a protected amount of money called the weekly compensation amount. The current weekly compensation amount is listed on the Local Court ​website. This amount is a net amount (an amount left over after tax has been taken out).

You should also be aware that an employer can charge a fee of $13.00 for each time an amount is garnisheed from your wage.

For more information about the weekly compensation amount, see Garnishee amounts on the Local Court website. 

Is the protected garnishee amount in my wages a net or gross amount?

The protected amount of money is called the weekly compensation amount and it is a net amount - an amount left over after tax has been taken out. 

For more information about the current weekly compensation amount, see Garnishee amounts on the Local Court website. 

How much money can be taken out of my bank account?

When your bank account is garnished, you must be left with a minimum balance amount. Any amount over that may be taken. 

For the current minimum balance amount, see Garnishee amounts on the Local Court website. 

If you are getting Centrelink payments into your bank account, the bank must leave an amount called a 'saved amount' or the 'minimum balance amount', whichever is the higher amount.

For more information, see the FAQ below Can my Centrelink payment be garnished?

If your bank account has a balance of less than the minimum balance plus $20.00, the bank does not have to comply with the order.

For more information, see Garnishee amounts on the Local Court website.

How do I find out i​​​nformation about the debt if my bank account has been garnis​hed?

If money has been taken out of your bank account, you should ask the bank why it has happened. If they tell you they were served with a garnishee order, it means that a court made an order that your bank provider must take out money to pay a judgment debt recorded against you. You can ask the bank which court made the order. Once you know the court, you can contact the court registry to find out more information about the debt, including the amount of the judgment against you

You should get legal advice about your options. If you do nothing, you risk other enforcement action being taken against you if the judgment debt amount hasn't been paid in full including fees, legal costs and interest. ​

Can my Centrelink payment​ be garnished?

If your Centrelink payment is being paid into a bank account, and the creditor gets a garnishee order on that bank account, they may be able to garnish a certain amount of money from your account to satisfy the judgment debt. This is either the 'saved amount' or the 'minimum balance amount'. If the two amounts are different, you must be left with the higher amount.

For the current minimum balance amount, see Garnishee amounts on the Local Court website.

The saved amount is calculated by adding the total amount of payments you would have received from Centrelink in the 4 weeks immediately before the garnishee order was made and deducting the withdrawals you made in that 4 week period. The leftover amount is the saved amount.

If a judgment creditor is trying to garnish your bank account and you get Centrelink benefits, you should get legal advice.

How do I stop a garnishee order​ on my wage?

If your wage is garnisheed you can:

• pay the judgment
• apply to the Court for a stay of enforcement
• apply to pay the judgment debt in instalments, if you agree you owe the money but want to pay the debt off in smaller payments. If the Court approves your instalment application the garnishee order will become a garnishee instalment order. This means that your employer will deduct from your wage or salary the instalments that were approved by the Court.
• apply to have the ​judgment set aside, if you did not respond to the Statement of Claim because of a good reason and have grounds to defend the claim. 

You should get legal advice if you want to apply to have the judgment set aside, as a costs order can be made against you if your application is unsuccessful.

For more information, see Responding to garnishee orders in Responding to enforcement on the My problem is about section of our website.

What can I do if I am not left w​ith enough money after my wage is garnisheed?

If a garnishee order was made against your wage or salary and you want to pay less towards the debt, you can make an application to pay by instalments.

You will need to complete a Notice of Motion - pay by instalments (Form 46 or Form 47).

If the court agrees to your application, and the creditor does not successfully object, the garnishee​​ order is converted into an instalment garnishee order. It means that your employer will take the approved instalment amount out of your wage or salary.

For a copy of the form, see Civil forms on the Uniform Civil Procedure Rules Forms website.

For more information, see Paying by instalments after judgment in After court on the My problem is about section of our website.

You should speak to a free Financial Counsellor about what you can afford to pay in instalments.

Will I get notice of a garnis​hee order?

If the creditor applied to the court for a garnishee order against you, they do not need to give you notice of their application. The Court will make the garnishee order without you being given notice. This may mean that you may only become aware of the garnishee order after you receive less pay or because your employer tells you about it.​

What is a garni​shee order?

If you have received a garnishee order for an employee it means that your employee owes someone money under a court judgment. The order requires you to garnish their wage or salary to pay the debt they owe.

A garnishee order is a court order that you must follow. You will need to make a payment to the creditor (who is listed on the order) within 14 days of when the wage or salary is due to be paid to the employee.

You must leave the employee the current weekly compensation amount. 

For more information, see Garnishee amounts on the Local Court website. 

If the employee is being paid any entitlements or leave loading this can be included in the amount that is garnisheed, as long as the employee is still left with the weekly compensation amount.

You can take an administrative fee each time you make a payment under a garnishee order. The current fee is $13.00. When you take this fee out it is does not count towards reducing the employee's debt.​

For more information, see Employers responsibilities when served with a garnishee order on the My problem is about section of our website. 

Can I show my emplo​yee the court order that says I have to garnish their wage?

It's up to you whether you show your employee the garnishee order, although you don't have a legal obligation to show them.​

What if the employe​e no longer works for me?

If there are genuine circumstances as to why you are not paying your employee a salary or wage you should notify the relevant court.

You can file with the relevant court a:

• Garnishee's Statement that [#No debt due or accruing #No wage or S​​alary payable] (Form 72).

On the form you will need to include the reasons why you believe that you will not be able to make the payments due under the garnishee order.

You must serve the form on the creditor (who will be listed on the order). If you need help to fill out the form you can contact the Local Court registry where the judgment was made.​

For a copy of the form, see Approved civil forms on the Uniform Civil Procedure Rules website. 

For more information, see Employers responsibilities when served with a garnishee order on the My problem is about section of our website. 

What if the debtor is an independent contractor instead of an employee?  

If the debtor is legally considered to be an employee of your company, you have a legal obligation to follow the terms set out in the garnishee order.

If the debtor is legally considered to be an independent contractor hired by your company, the obligation to follow the order may be different. Independent contractors generally run their own business and are considered to be self-employed. Therefore, you may not be required to follow the terms in the garnishee order, as you may not be paying them any wage or salary. 

If this occurs, you may need to file with the Court a Garnishee Statement that [#No debt due or accruing #No wage or Salary payable] (Form 72).

On the form you will need to include the reasons why you believe that you will not be able to make the payments due under the garnishee order. You must serve the form on the creditor (who will be listed on the order). 

For a copy of the form, see Civil forms on the Uniform Civil Procedure Rules Forms website.

Even if the debtor has an Australian Business Number or issues invoices, it does not automatically make them an independent contractor under law. There are a number of factors that need to be satisfied. If you are unsure about the legal relationship you have with the debtor, you should get legal advice. 

What if the employ​ee is paid less than the protected garnishee amount?

If the employee is getting paid less than the weekly compensation amount you will need to complete a Garnishee's Statement that [#No debt due or accruing #No wage or Salary payable] (Form 72).

On the form you will need to explain that you cannot garnish the wage or salary of your employee as they have been paid less than the weekly compensation amount.

This form must be served on the creditor (who will be listed on the order). If you need help to fill out the form, you can contact the Local Court registry where the judgment was made.​

For a copy of the form, see Civil forms on the Uniform Civil Procedure Rules Forms website.  

For more information, see Employers responsibilities when served with a garnishee order on the My problem is about section of our website. 

What if there are multiple g​arnishee orders for the employee?

Where there are multiple garnishee orders in place, you must pay them in the order that you were served with them.

Where there a multiple notices from government departments, for example the Child Support Agency (CSA) and Centrelink, you must pay them in the order that you get them. 

Where you receive a child support notice and a garnishee order from a court, you must pay the child support notice first. 

When you comply with the garnishee order(s), you need to ensure that your employee is left with the weekly compensation amount.

If you have been served with a garnishee order that you can't comply with, for example, because you have already taken money for another garnishee order and need to leave your employee with the weekly compensation amount, you will need to complete a Garnishee's Statement that [#No debt due or accruing #No wage or Salary payable] (Form 72).

On the form you will need to explain the reasons why you cannot comply with that garnishee order.

This form must be served on the creditor (who will be listed on the order). If you need help to fill out the form, you can contact the Local Court registry where the judgment was made. ​

For a copy of the form, see Civil forms on the Uniform Civil Procedure Rules Forms website.

For more information, see:

• Garnishee amounts on the Local Court website, and
• Employers responsibilities when served with a garnishee order on the My problem is about section of our website. 

What if I don't follow the garnishee order?

If you do not follow the terms of the garnishee order, the creditor may ask the court to make you responsible for the garnishee amount not paid.

If you are concerned about not complying with a garnishee order, you should get legal advice 

I have received a garnishee order for one of my employees. How do I pay the garnishee amount?

If you are an employer and have received a garnishee order for one of your employees, you should make the payment directly to the judgment creditor, not to the Court. When you do this, you need to make sure that your employee is left with the current weekly compensation amount.

The garnishee order form you have received should include the details of the judgment creditor. You can send the payment to the judgment creditor by post, or you can contact the judgment creditor to arrange another method of payment, for example internet transfer.

Your payment to the judgment creditor must be accompanied by a written statement showing:

• the amount of wage or salary due to the employee after tax less the current weekly compensation amount that the employee is entitled to keep
  
• the amount that you have retained to cover your expenses (up to a maximum of $13.00).

There is no special form for this statement.​

For more information, see:

• Garnishee amounts on the Local Court website, and
• Employers responsibilities when served with a garnishee order on the My problem is about section of our website. 
  

When do I pay the judgment creditor under a garnishee order?

Once you have been served with (given) the garnishee order, you have to pay the judgment creditor within 14 days from when the next wage or salary is due to be paid to the employee.​

You must continue to pay the judgment creditor each time the employee is due to receive their wage or salary, until the judgment debt is satisfied. 

For more information, see Employers responsibilities when served with a garnishee order on the My problem is about section of our website. 

What should I do if I can't contact the judgment creditor to pay them?

You should make reasonable attempts to contact the judgment creditor using the details on the garnishee order. If you are not able to get in touch, you should confirm with the Court that the judgment creditor or debtor has not taken any further action since you got the order.

If you do not comply with a garnishee order, the creditor may ask the Court to make you responsible for the garnishee amount.

If you are not sure what to do, you should get legal advice.

For more information, see Employers responsibilities when served with a garnishee order on the My problem is about section of our website.

What happens if there is a stay on the judgment?

A stay on a judgment stops enforcement action by the judgment creditor until the stay is lifted (removed).

If the Court orders a stay on the enforcement of the judgment on which the garnishee order is based, you do not have to comply with the garnishee order. 

A stay can be granted by the Court for many reasons, for example, if the judgment debtor (employee) has applied to set aside (remove) a default judgment or they have applied to pay off the judgment debt by instalments.

If you are not sure about what orders the Court has made about the employee's case, you can ring the Courts Service Centre on 1300 679 272. It is a good idea to have the case number handy.​

For more information, see Employers responsibilities when served with a garnishee order on the My problem is about section of our website.

What happens when the Court orders that the judgment debt be paid by instalments?

If the Court makes an order for the employee to pay the judgment by instalments, the amount that you must pay to the judgment creditor under the garnishee order is reduced to the amount of the instalment order. This means that you must make the instalment order payments from the employees wage or salary until the judgment debt is paid.

If an instalment order has been granted by the Court, you are no longer entitled to keep an administration fee (of up to $13.00) to cover your expenses in complying with the order.

If you are not sure about what orders the Court has made about the employee's case, you can ring the Courts Service Centre on 1300 679 272. It is a good idea to have the case number handy.​

For more information, see Employers responsibilities when served with a garnishee order on the My problem is about section of our website.