Inquiry into Debt Recovery in NSW: Submission to the NSW Legislative Assembly

Consumer Credit Legal Centre has made many prior submissions to the NSW Attorney General department regarding debt collection.  We are disappointed that despite apparent support for many of our proposals, none of our recommendations were ultimately implemented.  NSW currently has the lowest protections for debtors, well below the equivalent statutory protections in other jurisdictions. Summary of Recommendations in this submission:

1. Debtors should be provided with notice when a court judgment is entered, and prior to enforcement action taking effect
2. The protected amount debtors can retain for essential living expenses should be increased from the current level of $458.40 per week
3. Courts should exercise discretion in determining the appropriate proportion of wages to be garnisheed, taking into account an individual’s particular circumstances (such as number of dependents, living expenses and other financial commitments)
4. The length of time a garnishee can operate should be limited to 6 months
5. There should be legislative protection against a debtor losing their job as a result of a garnishee being issued
6. There should be a minimum protected amount reserved for a debtor’s essential expenses that creditors cannot access, set in line with the minimum protected amount for wage garnishees
7. Courts should be given discretion as to the appropriate amount to be garnisheed, considering the debtor’s whole circumstances
8. There should be greater court oversight over the use of debt garnishees in an oppressive manner, or as a fishing expedition
9. The categories of personal items not available for forced seizure and sale by the sheriff, should be aligned protections provided under the federal Bankruptcy Act 1966
10. Sheriffs should have discretion to seize and sell property to balance the need to avoid delay and expense with minimising hardship to the debtor or other persons.