Image: Martin Kinglsey
We all know how quickly bills can pile up and, when times are tough, it can be tempting to ignore overdue notices and demands from creditors. But even small debts can lead to serious long-term repercussions, particularly if your case is one of the thousands that incur a default judgment in the Magistrates’ Court each year.
In 2005/06, the Department of Justice reported that more than 30,000 complaints for civil consumer debt matters found their way to the Magistrates Court – 84% of these cases were for claims of less than $10,000 and 23% were for less than $1000. Most were decided by default judgment, with often disastrous implications.
In May, we gave the Consumer Action Law Centre a general grant of $33,523 to research default debt judgments in Victoria to understand why thousands of Victorians fail to seek legal help in relation to relatively small debt claims.
Consumer Action Law Centre provides free legal advice and representation to vulnerable and disadvantaged consumers across Victoria and is the largest specialist consumer legal practice in Australia.
Gerard Brody, Director of Policy and Campaigns at the Consumer Action Law Centre, tells us about the project and how it will help improve the lives of Victorians.
“Tens of thousands of Victorians incur default judgment in the Magistrates’ Court each year. In fact, court statistics show that up to 98 per cent of civil complaints in the Magistrates’ Court of Victoria end in default judgment.
A default judgment occurs when a demand for money is made through the court, and a consumer does not defend the matter. This means a judgment is made without any independent checking of the claim – and without any consideration of a person’s personal situation. Many default judgments are sought by large financial services companies, councils and debt collection agencies. Continue reading
Victoria Law Foundation 