Description
Are you owed money by a client who will not pay?
Do you have mounting unpaid invoices?
This video will briefly explain the legal debt recovery process.
Debt recovery is the legal process of collecting unpaid debts from a debtor.
The most common debts are unpaid commercial invoices or unpaid loans.
Failure to pay a debt means that the creditor will likely commence legal proceedings to recover the debt from the debtor.
If the debtor has refused to pay on the creditor’s terms, then the first step in the proceeding is to instruct your lawyer to send a letter of demand.
Letter of Demand
At a very minimum a letter of demand should include:
1. Amount of the debt;
2. Date the debt was due and payable;
3. The date of the letter of demand;
4. Description of the debt;
5. Reference to relevant evidence such as contracts, invoices, or agreements; and
6. A time and date on which the debtor has to pay the debt.
If the letter of demand goes unanswered then you may need to commence debt recovery proceedings in Court.
Commence Proceedings in Court
A proceeding for debt recovery is started by a claim and statement of claim in the Court or by minor debt application in QCAT.
Commencing debt recovery proceedings in the Courts is complicated and has the risk of a costs order being made against you, so it is important that you engage a debt recovery lawyer to act for you.
The purpose of legal proceedings is to obtain an enforceable money order which can be enforced against the debtor’s property. This can either be obtained by default judgment, summary judgment, or be awarded a judgment by the Court.
Enforcement
Once a creditor has an enforceable money order, then it can be enforced in a number of ways:
1. By enforcement warrant or Court order; or
2. By issuing a statutory demand and making a winding up application; or
3. By issuing a bankruptcy notice and then presenting a creditor’s petition.
Different enforcement options apply in different circumstances, so it is very important to seek qualified legal advice in relation to debt recovery and the enforcement of money orders.
Login to comment