Debt Collection

We have a system whereby debt collection can be effected at very affordable rates.

Debt collection

We have a system whereby debt collection can be effected at very affordable rates . In effect, no legal fees are payable except in circumstances where the claim for recovery of the debt becomes contested, or otherwise where legal intervention is required. Needless to say, our scale of costs are recoverable from collection. Otherwise, an automatic process is implemented for a very nominal processing fee. Read on.

Collection processes can be commenced in different courts in different ways depending on:

the amount involved, i.e., up to $100,000 in the Local Court and over this amount in the District Court;

 whether the debtor is a company or an individual. In the case of an action against an individual, it is a requirement that the collection process be commenced with a letter of demand. If the debtor fails to comply with the demand, you are entitled to issue a statement of claim.

If the debtor is a company, you can commence the process by way of a Creditor’s Statutory Demand (a winding up notice). This is a document which demands payment and states that in the event of a failure to make the payment, then the company  is deemed insolvent, and can be wound up. This can be a very powerful tool.

Generally speaking, one will only start with the winding up notice if there were some clear and unequivocal acknowledgment of the existence of the debt. These proceedings are conducted (by our office) in the Federal and Supreme Courts and these Courts does not entertain disputed claims. If the process has been commenced in this way, and the debtor, through his solicitor or otherwise, advises that he/she /it intends to make application to set aside the demand, it is often wise to withdraw it and commence by way of a letter of demand and statement of claim.

If you proceed by way of a letter of demand and statement of claim, and obtain a Judgment, then the winding up process can proceed and will be entertained by the Court.

It is also to be remembered that winding up the company has in some ways has quite the opposite effect to achieving your objective, that is to say, being paid, because if the company is wound up and a liquidator is appointed, your prospect of repayment is diminished by the liquidator’s capacity to realise assets and pay you amongst other creditors.

Winding up is but one way of executing Judgment against the company.

Once Judgment is obtained, there are a variety of ways in which a Judgment can be executed. An individual can be issued with a Bankruptcy Notice, which has in many ways the same effect as a winding up notice. That is to say, if the debtor fails to pay within the time prescribed by the Notice, then they have committed an act of Bankruptcy, which will entitle you to proceed to a bankruptcy petition. Once again a very powerful tool.

Winding up and bankruptcy are pressure mechanisms which normally bring enough pressure to bear on debtors that causes them to respond to the extent that they are able. It is to be noted that whilst these proceedures are highly effectice they are expensive procedures and filing fees are high.

The procedures available otherwise in the Local and District Courts are:

  • Garnishee, that is to say, requiring the debtor’s bank or one of his debtor’s to pay you;
  • Writ of execution, which requires the sheriff to sell goods and chattels and pay you from the proceeds of sale.
  • Sometimes, in order to determine which way to go, one can proceed to have a debtor examined, through the issue of an examination summons. This requires the debtor to attend Court to outline all his assets and liabilities, income and outgoings, so as to then enable you to make your choice as to which way to go in terms of executing Judgment.