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Say a defendent owns land worth $200,000. The defendant lost the case and has to pay $9,000
He does not have any money to pay.
Could courts order the land to be sold?
My question is general, but just in case someone asks for a jurisdiction, I am in Australia. This would generally fall under small claims.
Can a court order a large asset to be sold if the defendent lost the case on a relatively small amount? Say a defendent owns land worth $200,000. The defendant lost the case and has to pay $9,000. He does not have any money to pay. Could courts order the land to be sold?
In most U.S. law jurisdictions, yes, a high value assets can be ordered sold to satisfy a small money judgment or a small secured claim (i.e. a mortgage or the equivalent in real of personal property), subject to some exceptions that don't precisely target this concern but do alleviate it somewhat.
Forcing a sale is mostly a decision made by the collection lawyer and the judge has very little discretion in the matter in most cases, so long as all formalities are observed.
In most U.S. jurisdictions there are not minimum dollar amount of a debt that can be collected by execution and levy (i.e. seizure and sheriff's sale) on property of arbitrary value (although I am sure there must be at least one out there that does have a minimum dollar amount).
Some kinds of property are completely exempt from creditors claims (e.g. defined benefit pension plans).
Some kinds of property are protected up to a certain dollar amount of equity (most exemptions for household property and for homesteads, although a small number of homestead exemptions are unlimited). This allows courts and parties to disregard homes with little equity and low value personal property, focusing collection efforts on higher value property.
There are also laws in some states require that creditors attempt to collect the debt from all other known assets with equity that can be collected through a formal process (other than a personal residence), before attempting to sell the personal residence (unless the debt is a voluntary mortgage or mechanic's lien on the personal residence and no other assets).
There are several ways that the injustice of this can be avoided, if the debtor doesn't simply have the cash to pay off the debt.
First, the debtor may be able to borrow the small amount of the debt owed from someone else to pay it off and avoid the foreclosure of the asset.
Second, the debtor can take out a loan with the property as collateral to pay the debt, even if the debtor has few other assets.
Third, the debtor can sell their own property to pay the debt probably producing a better price than would be obtained at a sheriff's sale.
Fourth, someone other than the debtor and the creditor could bid at a sheriff's sale an amount closer to the fair market value of the property than the amount of the debt. Usually, the sheriff's sale price is still far below the fair market value, but it could be a lot more than the debt, and in those cases the excess goes back to the debtor. In some jurisdictions, bids for personal residences must be supported by appraisals that show what the fair market value of the property is and can't be less than that (apart from litigation costs and costs of sale).
Fifth, someone could file for bankruptcy and negotiate a payment plan for the small debt in that context.
Jurisdiction: australia
Land can only be seized to pay a judgement debt if the amount is more than $10,000. Personal property - jewellery, furniture, cars, boats etc. can be seized.
