Drowning in debt is a scary place to be. Sometimes you may simply feel as if there is no hope; you don’t know what to do, or where to turn. The many rules and regulations, legal terms, debt collection agencies and everything else in between, can often contribute towards the feeling of hopelessness. At Life After Debt ®, we believe that knowledge is power. Which is why, we take the time to provide you with as much knowledge, and in turn, as much power as possible. With that in mind, in this weeks’ blog, we are dipping our toes into the legal world, specifically regarding a court summons for a ‘Means Inquiry’.
Let’s start by clarifying some of the terminology you may encounter.
- Means Inquiry – an investigation into the debtor’s ability to pay (this may also be referred to as an Examination Summons)
- Judgement Debt – the amount owed
- Judgement Debtor – the person owing the money
- Judgement Creditor – the person the money is owed to
So, what is a Means Inquiry and what happens when you receive one?
What is a ‘Means Inquiry’?
A Means Inquiry is an investigation conducted in court to determine the judgement debtor’s means to the pay the judgement debt.
To put it simply, the Judge will decide whether they think you have the necessary means and money available, to pay the money owing.
This procedure is used to ascertain your financial status in order for the person to whom you owe money to decide, with the help of the courts, on what further action, if any, to take.
What happens when you receive a Means Inquiry?
Should you receive a Means Inquiry, you will be served in person (usually by a Bailiff) no less than five days before the court hearing.
You will be required to attend court and stand in front of a Judge.
The court will usually take the following into consideration:
- Your income, assets and liabilities
- The income, assets and liabilities of your spouse, de facto partner and dependants
- Any current or future earnings that can be appropriated from an employer
- Any outstanding debt owed to you by another person
- The existence, location and value of any property that can be seized and sold.
The person to whom you owe money must be in attendance. If they are fail to attend, the court has the power to award costs against them, which means they will be ordered to pay any costs you have incurred.
If you, as the person owing the money, do not attend court or refuse to be sworn in or answer any lawful questions, you will be deemed guilty of contempt, which can result in a fine or even jail time.
Like anything of this nature, legal advice is important and highly recommended.
In Australia, we are very lucky to have access to community legal centres and Legal Aid agencies that offer free legal advice, which can help with disputes and debt recovery through the courts.
Visit ASIC Money Smart for a list of contacts.
We hope this blog has given you some useful knowledge and understanding of the processes involved in Means Inquiries and, as a result, power!
Drowning in debt doesn’t have to be such a scary place… At Life After Debt® we have offices in Perth and Sydney and we can help you reduce unmanageable debt by offering you affordable, practical debt solutions without taking out another loan.
If you are struggling with debt and want to avoid legal action and bankruptcy then contact us today to receive honest and sympathetic advice, without judgement.
PLEASE NOTE: this article is provides general information only and does not replace professional legal advice. We strongly recommend that anyone facing legal action seeks professional legal advice as soon as possible. Many states have their own legal aid system such as WA: https://www.legalaid.wa.gov.au/