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Summary - A number of legal procedures to
recover outstanding school fees from parents is discussed.
Part 1
Introduction
Parents enrolling their children in boarding schools or
religious-based schools want their children to be educated in an
environment which reflects their values, beliefs and hopes. For a
variety of reasons, sometimes parents do not or cannot pay their
child's boarding and tuition fees (outstanding
fees).
Debt recovery for outstanding fees needs to be undertaken within
a framework reflecting each school's policy in the treatment of
their students' parents.
Commencing legal proceedings
Once instructions are received to proceed with legal action
against a parent for unpaid fees, the school has already exhausted
their efforts in recovering the fees. We begin by:
Sending parents a letter demanding payment of the fees in full
or make an offer to accept instalment payments;
File and serve a Statement of Claim on each parent if there is
no reply to the letter of demand; and
Seek Default Judgment if a Defence to the Statement of Claim is
not filed within 28 days of service on the parents or if no offer
to pay has been made.
An option open to schools is to accept parents' offer to pay
outstanding fees by instalments if a reasonable offer is made.
While obtaining judgment against a debtor is relatively easy and
cheap to accomplish, our experience has shown that the real
challenge in recovering outstanding fees is in enforcing the
judgment against the parent (judgment debtor).
Enforcing a judgment
If little is known about the judgment debtor's financial
resources or place of employment, an Examination Notice
(Notice) is served on the judgment debtor.
The Notice contains a series of questions directed at the
judgment debtor's financial circumstances and the Notice must
specify the period (not less than 28 days) within which its
requirements must be complied with, typically involving completion
and forwarding supporting financial information to us.
If the Notice is not returned to us or is not satisfactorily
completed, a court order for examination of the judgment debtor is
sought, which basically compels the judgment debtor to attend court
and provide their financial details.
The Examination Order must be served on the judgment debtor 14
days prior to the examination hearing and a Notice of Motion for an
Examination Order must be sent to the registry within 30 km of the
debtor's residence (or nearest registry)
If the judgment debtor fails to attend the examination, the
Court may issue an arrest warrant to compel the judgment debtor to
attend court.
Instalment agreements
A judgment debtor may at any stage make an offer to pay by
instalments. An instalment agreement may be confirmed by letter or
made an order of the court by filing it with the court. The effect
of an instalment order is that NSW law provides a stay of execution
of the judgment while an instalment order is in place.
In my next blog, I will discuss some of the options for
enforcing a judgment debt against parents for unpaid school
fees.
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