Almost every business or person has been put in a position where somebody owes you money and has neglected or refused to pay. Whether it is the $500 you lent your neighbour Jim last Christmas, or the $20,000 you are owed by ABC Constructions for the work you did for them under a contract, recovering outstanding debts has become a common occurrence and there are many methods in place to help you recover the outstanding debts you are owed.
In a business context, having a proven debt recovery system and debt recovery lawyer in place to recover any outstanding or bad debt can be crucial to your business cash flow. It is also important for your business image, as you don’t want to be seen as the business that people don’t have to pay because you don’t chase up your debts. This will only leave you open for other businesses to take advantage of you.
Our Sydney debt recovery lawyers have decades of experience and a proven track record in recovering millions of bad debt over the years for our clients. We use our well-established debt recovery process that we tailor to suit each individual’s needs. We understand that not all businesses or debts are the same, and can recover a range of debts ranging from small personal loans to large commercial debts.
How much will a debt recovery lawyer cost?
In debt recovery, you want to try and spend the least and recover the most!
This is why the first step is to send the individual or company that owes you money (referred to as a ‘debtor’) a well-drafted letter of demand including specific details about the debt and the basis under which the debt arose. For example, money owed under a particular clause in a contract, or the cost of repairs to your vehicle involved in a motor vehicle accident). The letter should also request payment within a certain period of time, usually between 7 to 28 days.
In our experience, a well-drafted letter of demand prepared and sent by a lawyer can resolve a debt in most cases, and with minimal costs.
Will I have to go to Court to recover a debt?
If the debtor fails to respond to the letter of demand, or responds but is refusing to pay, then if we believe you have exhausted all options, we will advise you on commencing proceedings to recover the debt. This can be done by filing a statement of claim or summons in Court. The size and nature of the debt will determine which Court or Tribunal is the most appropriate for the proceedings.
However, if the debt is under $20,000 (as at 28 February 2019), it can be dealt with in the small claims division of the Local Court. In this division, the normal procedural rules of evidence do not apply and the Court normally relies on written statements from the parties. If you have a lawyer representing you, you don’t have to be present in Court – although it’s recommended that you are in case you need to answer any questions or your lawyer needs to take instructions from you.
What happens after I commence legal proceedings to recover the debt?
Depending on how the debtor responds to the legal proceedings or claim will determine the next steps. The defendant has 28 days to file a defence or acknowledge the debt and request time to pay by instalments.
If no response is received we would normally apply for default judgment, and once a judgment is made by the Court, we would then proceed to enforce the judgment or debt.
How can we help?
Be proactive, not reactive.
It’s always better to be proactive and take preventative measures against bad debts than to react when the debts have already arisen and you need to recover it. Our debt recovery lawyers can add value to your business by reviewing your contracts, trade agreements and terms and conditions of trade, to ensure they are adequate and appropriate for your business, and able to be easily enforced.
We can ensure that your terms are clear and your processes reliable so you can avoid lengthy and costly litigation proceedings in the future.
There are also other tools and legal documents that we can recommend to protect your business interests. For example, if you were to enter into an agreement with a company and had to invest a significant amount of time and resources before getting paid, you might consider instructing us to draft a personal guarantee that the director of that company would provide to you to guarantee payment of any costs, disbursements or debts that may arise from the work you undertake.
If you need help drafting an agreement or your current arrangement is outdated or needs review, contact us to arrange a consultation.
The daunting legal process
We have Sydney based debt recovery lawyers who are highly experienced and completely familiar with the legal processes involved in New South Wales debt recovery services. We can help you at any stage of this process of recovering a business or personal debt, whether it is helping you write an effective and legally sound-letter of demand, or pursuing the matter through the Courts.
Our debt recovery lawyers are familiar with the process of enforcing judgments and can manage the process right through to bankruptcy or winding-up proceedings against a company if required.
We are also well aware of the costs of debt litigation and can advise you on whether it is commercially viable to proceed to Court and provide you with commercial alternatives.
Contact us to discuss the specific details of your business debt with an experienced debt recovery lawyer conveniently located in the heart of Sydney CBD. Alternatively, you can complete our Online Debt Recovery Quote form and we will get in touch with you shortly.