Debt Recovery Solicitors
Debt recovery services Sydney
Debt Recovery Solicitors
Debt recovery services Sydney
Debt Recovery Solicitors
Debt recovery services Sydney
Are you experiencing difficulty recovering the debt? SCB Legal comprises an experienced team of debt recovery solicitors servicing the greater Sydney area. Our expertise and commitment, assisting both small and large companies to recover monies owed to them, is something on which we pride ourselves.
We understand the enormous strain and uncertainty that a business faces when it is owed money. It’s a precarious situation when you’ve worked hard tending to a client’s needs only to discover that the bill is still outstanding. What can you do?
Endless emails, multiple phone calls, constantly having to remind yourself to follow up and write yet another email is at best, frustrating. Countless hours are often spent agonising about what measures you can take to ensure your invoices get paid. When you hire a qualified debt recovery lawyer, armed with knowledge and dedication, an actionable plan can be created, so that a successful outcome ensues.
SCB Legal offers a range of services to help you recover debt quickly and successfully
Business Debt Collection Rights
If a company or individual owes you money, many people query what rights they have. If the business is simply refusing to pay, it is highly recommended that you engage a solicitor and seek legal advice on what is the best course of action to take. If the debt is greater than $1,000, the solicitor may ask the debtor to pay interest on the money owed, as well as paying for all legal costs. The first step a solicitor usually takes is preparing a Letter of Demand.
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How To Collect Money Owed To A Small Business?
Many small business owners spend nights lying awake worrying about bills that haven’t been paid. It difficult enough paying one’s own bills than having to contend with the fact that companies and or individuals owe your company money. SCB Legal removes the frustration and concern by creating a plan of action to recoup your outstanding fees.
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Steps In The Debt Collection Process
- The first step is to ask the person that owes the money why they haven’t paid. It’s important to rule out the possibility that a failure to pay is the result of a simple misunderstanding.
- Issuing a formal Letter of Demand
- Beginning court proceedings
- File a Statement of Claim
- If the debt is unpaid or if a defence has not been filed within a certain time frame, a default judgement may be entered
- If a defence is filed, the claim will proceed via the court process until it is either settled or decided upon by a judge
What Is A Late Payment Demand?
A late payment demand is formally referred to as a Letter of Demand. This formal notice, otherwise known as a Demand letter, is sent after trying unsuccessfully, to recoup outstanding amounts, payments that are in debt. It encourages the party to pay the debt promptly, in order to avoid further action being taken. The Letter of Demand is the final reminder given to the other party, before taking a more serious action where this becomes a legal matter with possible court proceedings.
This formally warns the party that the monies owed must be paid, specifying the amount by a certain date and notifying the party that court proceedings will begin should they fail to comply.
A Letter of Demand must be sent before a claim for the debt can be lodged with the court.
Hiring a lawyer to prepare a Letter of Demand is by design, the most persuasive way you can recoup your money in the most cost effective manner. Often, when a party receives a notice that has been prepared on the law firm’s company letterhead and is signed by a solicitor, the party is more encouraged to act and swiftly. This valuable tool can help you avoid spending money going to court.
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Why Send A Final Warning Letter Template Before Legal Action?
- This clearly states your intention to commence legal proceedings if the debt is not paid.
- Provides the party a final chance to pay
- Helps you avoid costly legal proceedings and litigation
- Can be used as evidence in court, proving that sufficient time and opportunity was provided
- Demonstrates that you have attempted to settle the matter amicably
What Should I Do If I Receive A Demand Letter?
- Do not ignore a Letter of Demand
- Review the notice, ensuring you agree with the amount stipulated
- If you disagree with the amount, write a letter requesting further documentation and or clarification
- If you do not agree with the claim, immediately write a letter in response to the creditor asking for a detailed statement of the money owed. It is important to keep a copy of all letters sent during these interactions
- If you believe the claim is unfounded, seek legal advice in order to dispute the claim
- If you agree with the claim, pay the outstanding amount in full and settle the debt immediately to avoid any further action being taken
What If I Cannot Pay The Outstanding Amount?
If you are unable to pay the full amount, you can negotiate with the creditor and request an extension of time to pay the amount.
Alternatively, a negotiation can be made to start a payment plan, thereby paying off the debt in instalments. In some cases, you can negotiate a smaller amount be paid in full to finalise the debt or request to have the debt removed completely.
What Is A Statement Of Claim?
To start the court proceedings for debt collection, a solicitor will file a Statement of Claim. The person being issued it usually has 28 days to take action after it is served. If a party is sent one and ignores it, the creditor can apply to the court for a judgement against them.
How Should I Respond To A Statement Of Claim?
If you ignore the claim, the Court will order that you owe money to the creditor. This is called a Default Judgement. If you don’t believe you owe the money, you can file a defence. You have 28 days from the time the Statement of Claim is served to file a defence with the Court. Pay the debt in full. Negotiate a payment plan with the debt collection agency to avoid further court proceedings
Does A Time Frame Exist For Serving A Statement Of Claim?
Yes. A Statement of Claim must be served within 6 months of filing the claim.
In What Period Of Time Is A Party Required To Respond?
Once the debtor is served a Statement of Claim, they have 28 days to respond. Failure to respond within the given time time frame results, enables the creditor to apply to the court for a default judgement. In this scenario, there is no need for a hearing
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Certain circumstances lead to the matter be handled in court.
These include a debtor:
- Not paying the Judgement debt
- Failing to respond to a Statement of claim
- Filing a counter-claim
- Providing a defense; defending the claim
What Is The Process For Taking A Claim To Court?
If you are owed money and are taking it to court, the court needs to have all evidence in writing beforehand. This includes any written statements from any witnesses that can support the case.
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Once the hearing has started, the court will give both the creditor and debtor a chance to plead their case. The court will ask questions and seek clarification on any information provided, before arriving at a decision. If the court rules in favour of the creditor, the debtor has to pay them the judgment debt immediately and in addition, will have to pay their legal fees.
What Happens If The Judgement Debt Isn’t Paid?
If the judgment debt is not paid, the court has a few options available. The Court can:
- Make the debtor return to court, explain their financial position and explain why they have not paid. In this scenario it’s possible for the debtor to be declared bankrupt.
- Issue a garnishee order. This order stipulates that the debtor’s bank or employer must remove payments from their salary or other payments and pay them towards your debt
- Order an officer of the court to seize the debtor’s goods and sell them to raise enough money to pay back the debt. This is referred to as a writ for levy of property.
What If You Don’t Owe Or Cannot Pay The Debt?
If you believe that you don’t owe the money or if you’re not 100% sure, it is best to seek legal advice from a solicitor, so they can dispute the debt for you or stop legal proceedings from starting.
If the dispute ends up in court and you’re still obligated to pay, you may be liable for extra interest on top, as well as legal fees. Therefore, it is always better to have these disputes settled out of court.
If you cannot pay the debts, your solicitor can help negotiate payment arrangements with the people you owe. Payment arrangements may be smaller amounts that are paid towards the total debt owed over a longer period of time.
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Bankruptcy Proceedings As A Method Of Recovering Debt
Sometimes and unfortunately, businesses who do not pay their debts, only take the matter seriously when threatened by bankruptcy proceedings. In order to commence bankruptcy proceedings against a debtor, certain criteria must be met.
- Judgement is obtained against the debtor in the amount of $5,000 minimum,
including interest and costs incurred.
- The order may not be more than 6 years old, in accordance with the Bankruptcy Act
- Documents must be personally served on the debtor. It is important to note that the debtor’s registered business address must be known and the debtor needs to be identifiable.
- Checking with your solicitor as to whether the party has available monies, in order to make funds available to pay the debt. For example, the debtor may have real estate holdings that when liquified can provide a source of payment.
What Is Bankruptcy And Insolvency?
Bankruptcy is a term used in relation to individuals, whereas insolvency is used in regard to companies. When an individual or business cannot pay their debts, they relinquish their assets and control of their finances in order to meet the demands of their debt, in exchange for suffering legal action taken by creditors.
What consequences result when a person/business is declared bankrupt?
- Bankruptcy usually lasts for 3 years and 1 day from the day your statement of affairs is filed
- Restrictions may be placed on your employment
- Restrictions may be placed on you running a business
- You may not be able to travel overseas
- Your name will appear on the National Personal Insolvency Index (NPII)
- You may be prevented from gaining future credit
Are you a business who has tried desperately to recoup debt? SCB Legal’s dedicated team of debt recovery solicitors will help you recover debt.
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