The Law Handbook 2024

Chapter 5.2: Are you in debt? 357 instalment order made. However, there would need to be a significant change in your financial circumstances to obtain a variation. Who may grant an instalment order? A magistrate, when giving the original judgment, may order that the debt be paid off by instalments. This usually happens after hearing an application from either the creditor or the debtor. The registrar of the Magistrates’ Court can grant or refuse an application, with or without the presence of the two parties. The registrar cannot change the terms of the proposed instalment order; they must be accepted as they are or the application must be refused. The registrar must also inform all parties of the decision to grant or refuse an application. If your instalment order application is refused, you must wait three months before another application can be made. However, you can object to that refusal if a registrar made the decision. Objection to granting or refusing an instalment order If an instalment order application is refused or granted by a registrar, either you or the creditor may object to the decision by filing a Notice of Objection, on form 61D, with the registrar of the Magistrates’ Court within 14 days of being notified of the outcome of the application. The court will then hear the objection and the magistrate will decide to confirm, change or cancel the registrar’s instalment order decision. The magistrate is required to question the debtor in person at the hearing before making an order, or be otherwise satisfied that an order should be made against the debtor. Instalment agreements At any time after the original judgment is made, you or the creditor may lodge an instalment agreement in form 61E with the registrar. Both you and the creditor must agree to this action. An instalment agreement sanctioned by the Magistrates’ Court must: 1 specify the amount of the judgment debt still owing to the creditor; 2 set out the details of the agreement (i.e. the amount of each instalment, the timing of payments); 3 be accompanied by a statement of your financial situation (form 61B); and 4 include your promise to pay the amount as proposed in the instalment agreement. Failure to pay an instalment agreement can result in the creditor summonsing you to an oral examina­ tion, which usually results in additional legal costs being added to the judgment debt (see ‘Summons for oral examination’, below). Be aware that some creditors have attempted to misuse the procedure by pressuring debtors into consenting to a further instalment agreement with extra legal costs added to the judgment debt. Before consenting to a further instalment agreement, seek advice. Changing or cancelling an instalment order or agreement Either the creditor or you can apply for a variation or cancellation of an instalment order or agreement (s 8 JDR Act). You can apply to vary or cancel an instalment order or agreement if your financial situation changes and you are no longer able to comply with the original order or agreement. Your application should be accompanied by as much supporting evidence as possible. A creditor can only make an application to vary or cancel the instalment order if: 1 there has been a substantial increase in your property or means; or 2 any information given in support of the instalment order application or in the instalment agreement was inaccurate. If the creditor makes the application, it must be accompanied by a supporting affidavit (a written document sworn on oath) giving the reasons for the application. The court must be satisfied that there is evidence supporting the reason to vary or cancel the instalment order. A hearing of the application by oral examination will be arranged. At the oral examination At the oral examination, the court may question you about your income, assets, debts and liabilities, and about anything related to your financial circumstances and means and ability to pay off the debt (s 15 JDR Act). Consider taking supporting evidence about your financial situation to the