Solutions to debt recovery
When a plaintiff win a case in court, the judge would order the losing party to pay a sum of money. However, the losing party may be unwilling to pay. To solve this issue, there are various ways to enforce the judgment and recover the sum of money so your effort to bring the case to court would not be wasted.
Note: According to s.4 of Limitation Ordinance (Cap. 347), legal actions regarding to actions of tort and contract could not be brought 6 years after the cause of action accrued.
If the creditor has no information on the debtor’s assets, the most direct option is to require the debtor undergo an oral examination where the debtor has to answer under oath on the assets he possesses.
Writ of Fieri Facias:
When a Writ of Fieri Facias is enforced, a bailiff is instructed to take possession of personal property of debtor and to sell it to cover the judgment debt.
A judgment could be enforced by Garnishee Procedure. If the debtor is a creditor to a third party, the Garnishee Procedure would allow the third party to pay the creditor directly. Most commonly, if the debtor possesses money in his bank account, this order could freeze the sum so the debtor would not be able to transfer out the money. The creditor would be able to collect the sum directly from the bank.
Charging order and Order for sale: If the debtor does not have sufficient cash to pay the debt but owns a property, the court could make an order imposing on the property a charge to secure payment from the debtor. If the debtor fails to satisfy the debt in accordance with the charging order, the creditor would be able to apply for an order for sale and the sale of property could cover the debt.
In order to prevent the debtor from escaping liability, the creditor could apply for a Prohibition Order. Under this order, the debtor would not be allowed to leave Hong Kong.
Bankruptcy or Winding up Proceedings:
This is normally the last resort in enforcing a judgment. A warning to take bankruptcy or winding up proceedings could be an option to encourage the debtor to pay off the debt. When a bankruptcy or winding up proceeding has taken place, the debtor’s obligation to cover the debt would be discharged and the debtor’s assets would be shared among his creditors.
Stop notice and Restraining order
An application for a stop notice would allow the creditor to be notified if there is any proposed transfer of securities or payment. A restraining order would prevent transfers of property so the property could be used to satisfy the debt.
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