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Debt Collection and

Enforcement of Judgments

Kimberley D. CainesAssociate

MJM [email protected]

Disclaimer

The following is a cursory overview on the debt recovery process and the enforcement of money judgments. Time will not permit us to delve

deeper into the various sub-topics.

Overview

Debt Recovery Process Types of Claims

Types of Judgments After the judgment… Magistrate’s Court

Supreme Court Court’s Approach

Practical Tips

Debt Recovery Process

Two Courts that deal with Debt Recovery in Bermuda• Magistrate’s Court (any claims up to $25,000)

› Civil Court• Supreme Court (any claims over $25,000)

› Commercial Court› Civil Court

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Debt Recovery Process cont’d

Magistrate’s Court • Ordinary Summons• Judgment Summons• Warrant of Arrest• Committal to Prison• Writ of Execution

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Supreme Court• Writ of Summons

• Process more involved

Types of Claims2

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Money Claims Personal Injury Breach of Contract or Agreement

Landlord and Tenant Employment Matters (wrongful dismissal) Construction Claims Service invoices

Types of Judgments2



Two Types of Judgments which can be obtained: Judgment on Merit or Fact Default Judgment A judgment may be liable to being:

Set-aside; or Appealed to a higher court [there are certain parameters: such as time limit and points of law

which apply] Judgments attract interest per annum at the statutory rate of 5% (Mag Ct) or

7% (Supreme Court)

You have a judgment now what?



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Common misconception that money will automatically flow from the judgment once obtained

Often times a money judgment will have to be enforced (assistance by lawyers will facilitate this process)

Magistrate’s Court



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Procedure is guided by the Magistrate’s Court Act 1948, the Magistrate’s Court Rules 1973 and the Debtor’s Act 1973. Enforcement of Judgments Judgment Summons Attachment of Earnings Writ of Execution Default Clauses

Supreme Court



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Procedure is guided by the Rules of the Supreme Court 1985 and the Debtor’s Act 1973

Writ of fieri facias Examination of Judgment Debtor Garnishee Proceedings Judgment Summons Committal to Her Majesty’s Prisons Writ of Possession (mortgagor/ mortgagee matters)

Court’s approach



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The court has to balance both sides (debtor and creditor) when enforcing judgments.

Court has a discretion in whether to order a particular remedy of enforcement that is being sought

Wording of court rules is typically: may Court is understanding of current economic climate Judgments (Reciprocal Enforcement) Act 1958

Ability to enforce judgments in certain other jurisdictions

Practical tips to safeguard your Business



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Obtain proper legal advice to draft and review contracts and agreements BEFORE executed

Obtain as many details of the individual (name, address etc) When possible obtain security from individuals – value of

security cannot be underestimated Consider whether there are other secured creditors

Keep proper track of payments made on debts Keep track of debts/ secure internal accounting guidelines Be mindful of time limit to bring a claim

Any Questions? 8

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