Debt Recovery - a General Overview
April 19, 2023
Author name
Securing money owed to you can be time consuming, frustrating and ultimately futile if your options are not clearly understood. In extreme cases, an unpaid debt can lead to the failure of the creditor’s own business.
Debt recovery is the process of recovering unpaid debts through letters, email, phone calls and/or personal contact with a person who has neglected his/her end of the deal to pay for services or products you have supplied.
Bailiwick Legal are experienced in helping clients recover money that is owed by another business. We have a detailed understanding of the legal remedies available to you. We pursue both formal and informal channels of debt recovery until a satisfactory outcome is reached.
In addition, we help clients set up robust terms of trade, properly secure any debts, and provide options for fast and efficient recovery.
The Debt Recovery Process
The Process can be summarised as follows:
1. Contacting the Debtor
Before going straight to court, it is wise to first contact the debtor and ensure repayment of the debt is unlikely. The debtor may usually be contacted by phone, mail or email.
2. Letter of Demand
If the debtor fails to repay the debt, a letter of demand can be sent. The letter of demand will include the details of the debt and instructions for payment including expected time of payment. A letter of demand will state that the matter has now entered the debt recovery process and may potentially result in legal proceedings in a Court.
3. Start Court Proceedings
Commencing Court proceedings will be the next and final step of the debt recovery process. Commencing court proceedings involves several legal processes, time limits and details which must be fulfilled, which is why seeking legal advice early is highly recommended.
However before commencing Court proceedings, the relevant Court must first be identified. The amount of the debt you are seeking to recover will determine which Court will be engaged.
Generally:
- claims less than $75,000 will be commenced in the Magistrates Court
- claims between $75,000 and $750,000 are in the District Court
- claims above $750,000 are in the Supreme Court.
The three Courts all have different processes and procedures, which we at Bailiwick Legal can explain in plain language and guide you through.
At Bailiwick Legal, we highly recommend seeking legal advice and representation when seeking to recover debts in the Courts due to the numerous rules and processes the parties must comply with to give yourself the best chance of recovering your debt.
4. Judgment
Once Court proceedings have been commenced there are many ways that judgment can be made against a debtor. A judgment against a debtor allows you to use the Court processes to then recover the debt.
Recovering Judgments
If the debtor fails to repay the debt after judgment has been awarded, you should commence enforcement proceedings to recover the judgment from the debtor using the Civil Judgement Enforcement Act procedures in the Court.
As an alternative, there are the below options:
- Bankruptcy notice – if debtor is an individual followed by a Sequestration Order – (if the bankruptcy notice is not satisfied)
- Statutory demand – if debtor is a company followed by a winding up petition (if the statutory demand is not satisfied)
Once judgment is awarded in your favour, we can advise you of the best avenue to recover the debt.
Summary
Debt recovery is a complex process, where obtaining legal advice is essential and vital to ensure all processes are complied with. Legal advice will ensure your situation is analysed to determine the best process to undertake and will assist your claim tremendously.
At Bailiwick Legal, we can:
- Help you get back money you are owed through informal as well as formal debt recovery.
- Help set up your credit and debt process, so they properly protect your business from bad payers, and provide options for fast and efficient recovery if required.
- Help you reach a workable and commercial solution through negotiation and other alternative dispute resolution.
- Draft letters of demand and other process documents to prompt recalcitrant debtors into action.
- Apply to wind up a company, pursue director guarantees, or take other legal action needed to protect your interests.
If you would like further information in relation to how the above matters may affect your business, please contact us on (08) 9321 5451 or by email at office@bailiwicklegal.com.au.
By Luke Davies (Special Counsel)
For further information about our legal services, please visit our website: https://www.bailiwicklegal.com.au/
The above information is a summary and overview of the matters discussed. This publication does not constitute legal advice and you should seek legal or other professional advice before acting or relying on any of the content.
Our June 2024 newsletter is now available. Have a read to find out what we have been up to in the first half of the year!
The International Sustainability and Carbon Certification (ISCC) System has come to the attention of many Western Australian farmers recently, as the scheme has changed one of its policies regarding aerial spraying. What is the ISCC? The ISCC is one of the world’s largest voluntary sustainability certification schemes enabling participants to demonstrate they are producing materials in a sustainable way that meets or exceeds community expectations. In Australia it is widely used in the canola industry, enabling Australian canola growers to access the European biofuel market. CBH Marketing and Trading holds certification for the ISCC EU and ISCC PLUS programs, that cover canola, barley, oats, wheat and lupin, allowing WA growers to participate in both programs. Participating in the ISCC program can result in a premium on grain, however participants are subject to more stringent measures to satisfy sustainability accreditation requirements. Recent decision on aerial spraying ISCC Principle 2.6.2 prevents aerial spraying from taking place within 500 metres of a body of water. CBH has successfully lobbied for an exemption to this Principle, for farm dams and salt lakes of low ecological value. As part of its lobbying, CBH provided expert reports to the ISCC on the hydrology and ecology of WA farm systems. For farmers who are signed up to the ISCC program, this removes an obstacle during the season for weed management. The Principle does still require a 500 metre buffer for other bodies of water, including freshwater lakes, rivers, ponds or creeks. However, for those who farm yabbies and marron, this change may not be welcome. Marron and yabby farmers have noticed impacts on their populations where aerial spraying has taken place close to their properties, and aerial spraying can unintentionally damage natural vegetation, including young and old growth trees. For growers, it’s always prudent to follow best practice guidelines for aerial spraying to avoid spray drift – including monitoring weather conditions and the effect of water added to the chemical. For some farmers, this decision may prompt an examination of whether signing up to the ISCC program might be best for their business. In this circumstance, it is important to weigh up the potential benefits of the program compared to the sustainability accreditation requirements. For others, this decision is a timely reminder to stay up to date with best practice guidelines when it comes to spraying, particularly during the seeding season. For assistance with all of your agribusiness needs, contact Bailiwick Legal on 08 9321 5451 or email office@bailiwicklegal.com.au By Ciara Nalty (Solicitor) For further information about our legal services, please visit our website: https://www.bailiwicklegal.com.au The above information is a summary and overview of the matters discussed. This publication does not constitute legal advice and you should seek legal or other professional advice before acting or relying on any of the content.
How does the Annual Wage Review affect workers and small business owners? Each year, the Fair Work Commission reviews the National Minimum Wage and the minimum wages set out in awards. Cost of living and inflation are front of mind for both employers and employees, and this year’s Annual Wage Review is likely to see an increase in the minimum wage and award rates. The Annual Wage Review is conducted by an Expert Panel, which takes submissions from interested groups, including the Federal Government, unions, and business lobby groups. The Federal Government’s submission to the Wage Review this year called for an increase to the minimum wage, though not specifying an amount. The Australian Chamber of Commerce and Industry has advocated for an increase of 2 per cent, at most. The announcement will likely take place in early June and any increase to the national minimum wage will take effect in the first full pay period on or after 1 July 2024. Failure to pay employees at least the minimum rate that is set out in an applicable award can result in penalties, including requirements for back pay and fines. The Fair Work Ombudsman uses its enforcement powers to issue compliance notices to employers, and recovered $14.8 million in unpaid wages in 2022-23. Small and medium businesses are subject to the same scrutiny as large businesses. For business owners, this is a timely reminder to review employment agreements and payments to staff. You should be conscious of which awards cover your staff members, as award rates for each level increase commensurate with the national minimum wage increase. It is also important to be aware of employee entitlements and set-offs, to ensure you are paying employees what they’re entitled to and avoiding future claims. If you are not sure what award your employee is covered by, have a question about employment conditions or require any other assistance with employment and workplace matters contact Bailiwick Legal on 08 9321 5451 or email office@bailiwicklegal.com.au . By Ciara Nalty (Solicitor) For further information about our legal services, please visit our website: https://www.bailiwicklegal.com.au The above information is a summary and overview of the matters discussed. This publication does not constitute legal advice and you should seek legal or other professional advice before acting or relying on any of the content.
Working with you, working for you
