The court can make an order for the payment of a judgment by instalments, payable in such amounts and at such times as specified. If an order is made, it will stay enforcement of a judgment.
What will the Court weigh up?
Case law shows a number of considerations that the court will look as to when an instalment order ought not to be made. These include:
- where the judgment debtor's financial means are enough to enable the judgment debt to be paid immediately;
- if it is obvious that the judgment debtor would not be able to comply with the instalment order;
- if the time for payment is unreasonable;
- if it would not result in a net reduction of the judgment debt because of the amount of the interest that continues to run on the judgment debt.
- if the judgment creditor would suffer hardship by the amount of time it would take to pay the debt by instalments.
No one consideration is prevalent but must be weighed against the others as a whole.
How long is too long?
Our experience is that 12 to 24 months is not an 'unreasonable' time period to pay a debt by instalments however it would depend on the circumstances. In IceTV v Duncan Ross & Ors, 27 months was not considered an unreasonable period to pay a $50,000 debt by instalments. In Hellier Capital Pty Ltd v Albarran [2009] NSWSC 403, 4 years was allowed to pay off a debt of $1.6 million by instalments!
If the time period is not unreasonable, the debtor has capacity to pay and it is evident that this is your best chance of getting paid, don't object and wait to see if the debtor complies. It is something you can closely monitor without expending further legal costs. An instalment order can be varied or set aside by application to the court if the debtor's financial circumstances change (such as the debtor coming into a wind fall or securing better or any employment.)
Alternatively, don't be hesitant to object to an instalment order if it is obvious the debtor can afford to pay more or it would take an unreasonable time to pay. The more grounds of objection you have the more likely your chances of the instalment order being rescinded.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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