What can a debt lawyer do to help recover a debt?

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Below is a series of questions about debt recovery that our debt lawyer Adam Halstead answered at one of his latest radio interviews.

Debt recovery can become complicated – early advice from a debt lawyer is a good approach.

A debt lawyer can help you?

  1. Send a formal letter of demand setting out the requirement for the debtor to pay and what they might expect of payment is not received.
  2. Prepare and submit a Statement of Claim at court (the Local Court has jurisdiction for small claims up to $10K and general claims up to $100K).
  3. Is aware of the time limits that applies to enable a claim.
  4. Prove the debt in court if debtor defends the claim.
  5. Obtain judgment from the court to enforce and recover the debt.

Unpaid debts are a common legal issue that many people and all small business will experience at some stage.  A debt arises where one person has agreed to pay another person money in return for something (usually goods or services). 

Q. A customer or an acquaintance owes me money – how do I get them to pay?

Answer:

  • You can make a claim asking someone who owes you money to repay the money.
  • This can be done by telephone call, email, SMS or writing a letter, which could be a reminder notice for an outstanding bill.

Q. What if I have tried all this and they still have not paid?

Answer:

  • If unsuccessful then speaking to a debt lawyer is often the best step to take next.
  • A common next step is to send a letter of demand, which is a formal letter with a summary of the debt and that requires the money be paid within a certain period.
  • Some businesses may have a relationship with a credit control agent, generally known as “debt collectors”, that will usually take the steps already mentioned in return for a fee.
  • Debt collectors can only take recovery so far after which they also need to refer the matter for legal action by a debt lawyer.

Q. What happens once the court gives a judgment?

Answer:

  • A “judgment debt” is obtained that is enforceable to recover the money
  • A judgment debt is valid for 12 years from the date judgment is given.
  • Options to enforce the judgment debt include:
    • Examination summons – brings the debtor to court for questioning about their affairs
    • Garnishee order – on bank accounts, wages
    • Writ of execution – seizure and sale of personal property by sheriff
    • Writ against land – seizure and sale of land
  • Options to bankrupt a debtor if a person ($5,000) or wind-up a debtor company ($2,000)

 

We can help with debt recovery

Contact Adam or any of our offices to talk to someone about your concerns.

 


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