Debt Recovery Process & Getting a Solicitor Involved
The process for debt recovery begins when an invoice becomes outstanding, and the debtor has failed to make payment. Generally, the first step will be to issue a letter of demand setting out the debt owed and the time frame for repayment before any further action is taken.
If the debtor is not cooperative (either paying the debt in full or entering into a payment plan), the next step is to get a debt recovery solicitor to initiate proceedings. The cost and process of debt recovery will be dependent on the amount of the debt owed:
a. if the debt is under $10,000, a Minor Case Claim can be brought in the Magistrates Court. A debt recovery lawyer cannot act in these claims unless a court grants permission, however, we can assist with the preparation and lodgement of various Court forms;
b. if the debt is between $10,000 and $75,000, a General Procedure Claim can be lodged with the Magistrates Court. In all claims above $10,000 a debt recovery lawyer prepare your claim and represent you in the matter;
c. if the debt is between $75,000 and $750,000 a claim may be brought in the District Court; and
d. where the debt exceeds $750,000 the claim will be heard in the Supreme Court.
After the initiation of the debt recovery process, generally one of the following will occur:
a. where the debtor fails to respond to the claim, the Court will award default judgment upon your application. This is where judgment is given in your favour without a trial;
b. a debtor may respond by admitting to the claim and offering to pay the debt; or
c. a debtor denies the claim which leads to further proceedings to either prove or disprove the existence of the debt. If they have no real defence, you may be able to apply for summary judgment