Temporary relief from enforcement action by a creditor
Julia is a small business owner who runs a café. The café has been hit hard by the economic impact of the coronavirus. Until recently, Julia had always been able to make on-time payments to creditors, like the bank and suppliers.
Like most cafés across Australia, Julia's has only been able to sell takeaway coffee and food. The cafe's revenue has more than halved and Julia has been unable to pay any creditors.
Most of Julia's creditors have been supportive and negotiated new payment terms . However, one creditor didn't and instead obtained a court judgment against them.
The court's judgment allows a creditor to apply for enforcement processes for the judgment debt, which could mean Julia's assets are seized and sold to pay off their debts.
Julia contacted the National Debt Helpline for free financial counselling.
After speaking with the financial counsellor, Julia decided to apply for Temporary Debt Protection. Once the application was accepted, this stopped the creditor from enforcing the judgment – meaning Julia's assets weren't seized – for a period of 21 days.
Julia used the extra time during the temporary debt protection period to restructure their finances and enter an affordable repayment plan with the creditor.
Important information
AFSA encourages anyone considering entering into Temporary Debt Protection to first seek advice from a free financial counsellor by calling the National Debt Helpline on 1800 007 007.
Note: These case studies do not constitute legal or financial advice. You should consider whether the options referred to in the case studies are appropriate for you, and seek advice if necessary, before taking any action.