Different Ways on How You Can Recover The Judgment Debt

I have won a lawsuit and obtained a legal judgment. What should I do next? Does it mean that I would automatically get what I wanted as stated in the judgment? What happened if the party does not comply with a judgment?

The answer is simple. You may enforce your judgment against the defaulting party. We will discuss the different ways on how you can recover the judgment debt below.

1. Bankruptcy/Winding Up proceedings

   Bankruptcy or Winding up proceedings are among the most common avenue to claim for judgment sum granted by the Court. One may consider to enforce a judgment via bankruptcy or winding up proceeding to recover the sum owed.
   For a bankruptcy proceeding, the individual must owe a judgment sum of RM50,000 or more. Whereas for winding up proceeding, the company must owe a judgment sum of RM10,000 or more.In light of the Covid-19 crisis, SSM on 10.4.2020 announced that the prescribed amount of RM10,000 for winding up of a company would be increased to RM50,000.00 until 31.12.2020.

2. Garnishee Proceedings

   Garnishee Proceeding is a form of recovery by a creditor of money which is due or accruing due to a judgment debtor in the hands of a third party (garnishee).Where a third party (garnishee) owes money to a judgment debtor, the judgment creditor (garnishor) may apply to the Court to order the garnishee to pay directly to the judgment creditor the amount of any debt due or accruing to the judgment debtor from the garnishee.

3. Writ of Seizure and Sale

   A writ of seizure and sale is one of the writs of execution. It enables the judgment creditor to command the sheriff/bailiff to seize and sell the judgment debtor’s property to recover the judgment sum due. It is applicable for both movable and immovable property.

4. Order of Committal

   An order of committal’s function is to punish a party for non-compliance with a judgment under Order 52 of the Rules of Court 2012. In the circumstance, the Court has the power to order the defaulting party to be imprisoned and/or fined due to contempt of Court.There are a number of requirements to be fulfilled before granting such an order, including but not limited to the endorsement of a penal notice on the judgment.

5. Judgment Debtor Summons

   The judgment creditor may apply for the issue of summons for the judgment debtor to be orally examined by the Court concerning his ability to pay the judgment debt and to discover under oath the whereabouts of his property.In this regard, the Court may either issue a warrant of arrest if the judgment debtor does not appear after the summons has been served or make an order requiring the judgment debtor to pay a lump sum or instalments.
   If the judgment debtor then defaults, he may be asked to show cause and may be committed to prison not exceeding 6 weeks.

6. Writ of Delivery/Writ of Possession

   A writ of delivery may be used to enforce a judgment/order to deliver any movable property or payment of their assessed value. It may command the Court’s sheriff to seize and deliver the movable property to the judgment creditor and/or sell the movable property to recover the judgment debt. The writ must be served on the judgment debtor.
   A judgment/or order for possession of the immovable property may be enforced by the issue of a writ of possession. The writ of possession commands the sheriff to take possession of the immovable property and/or seize and sell any movable property to satisfy the judgment debt.

In conclusion, various enforcement methods are being in place when the judgment debtor has failed and/or refused to comply with a judgment. However, to maximise the chances of debt recovery, one should seek professional legal advice to decide which enforcement procedure to take based on the case’s circumstances rather than taking a “One-size-fits-all” approach.

This article is written by 

Aw Yong Lei Bin
Senior Associate, Low & Partners