Sunshine Coast debt recovery lawyers help and assist people with recovering debt and a lot more.
If you have a business on the Sunshine Coast that offers trade credit to clients/customers, then you would have likely had those clients/customers not pay their debts.
Unfortunately this is the cost of offering credit, ultimately at some stage a debtor is going to be unable to pay their debt to you.
There are a number of options open to a creditor to try to recover this debt, and Sunshine Coast debt recovery lawyers can provide advice and assistance in all Sunshine Coast debt recovery matters.
Sunshine Coast Debt Recovery
If you have a debtor who will not pay then you can take the following non-legal steps to try to resolve this debt dispute. They include:
- Negotiating with the debtor to reach a settlement; or
- Try an alternative dispute resolution (“ADR”) process.
These options will be explained in more detail below.
Negotiating with the Debtor to Reach a Settlement
A letter of demand from a lawyer has a lot more weight behind it, and shows that you are serious about collecting your debt.
In the first instance Sunshine Coast debt recovery lawyers can attempt to negotiate a settlement with the debtor.
They will usually send an open letter of demand outlining your legal position and foreshadowing legal action.
If you are agreeable, if they can’t pay in full, then a Sunshine Coast debt recovery lawyer can get them to execute a deed of settlement with a repayment plan.
Most debt disputes should be resolved by negotiation. If the debtor disputes the debt, then you can try alternative dispute resolution.
Try an Alternative Dispute Resolution (“ADR”) Process
There are a number of different alternative dispute resolution methods, including:
- Attending a mediation with the debtor;
- Attend an expert arbitration with the debtor;
- Determination by an expert;
- BIFA adjudication; and/or
Each of the above can apply in different circumstances and may not be suitable for all debts. Sunshine Coast debt recovery lawyers will need further information to advise which of the above are acceptable in your particular debt dispute.
If you don’t think that negotiation or other forms of ADR will get the debtor to pay, then you can commence legal action.
Sunshine Coast Debt Recovery Action
A Creditor can commence legal action in the Court by claim and statement of claim.
The statement of claim outlines all of the relevant facts of your case which you may later need to support with evidence.
Service of the Process
Once filed a creditor will need to serve the defendant with the claim and statement of claim.
It is advisable to use a process server to serve all of our documents, as they will serve it correctly and provide an affidavit of service.
Once served, the debtor will have 28 days in which to file and serve a defence.
Default judgment – If the debtor does not file a defence within the requisite time then a creditor can apply for a judgment in default.
This will be judgment for the full amount, plus the scale costs, plus interest in most cases.
Summary Judgment – If he does file a defence, but there is no defence to this matter then you can apply for a summary judgment if the court is satisfied that:
- the defendant has no real prospect of successfully defending all or a part of the plaintiff’s claim; and
- there is no need for a trial of the claim or the part of the claim.
Summary judgment is a lot harder to get and will only be given in the clearest of cases.
However, if a creditor is successful then the creditor can seek some costs of this application paid by the defendant.
If the creditor loses then they may have to pay the defendants’ costs of the application.
Reply – If the defendant does file a defence and the defence is a valid one, then a creditor will be unable to apply for judgment and will need to draft and file a reply to the defence. This will essentially mean the close of pleadings.
Counterclaim – You should be aware that the defendant may also file a counterclaim, being a claim that the defendant alleges to have against you. This will need to be defended.
If you are unable to get judgment early then the matter will proceed toward a trial. The first step in proceedings after the close of pleadings is disclosure.
The plaintiff will be required to disclose all of the material that they intend to rely on as evidence to the defendant, and in turn, the defendant is to disclose to the plaintiff all of the material they intend to rely on as evidence.
Once disclosure has been completed, the matter must be listed for a settlement conference.
A settlement conference is a meeting convened by the registrar at the Magistrates Court and is a final attempt to encourage the parties to settle the dispute prior to getting a trial date.
The settlement conference is a pre-requisite to getting a trial date in the Magistrates Court.
If the matter does not settle at the settlement conference then the matter will be listed for a trial. The trial can last anywhere from 1 day and will cost around $10,000 per day for a solicitor and a barrister.
In almost all cases the best result is to try to settle the debt dispute before the trial stage.
Issuing a Statutory Demand
If you think that the insolvent debtor company has assets then you can serve that company with a statutory demand for payment.
Failure to comply with a statutory demand raises the legal presumption that the company is insolvent. With this presumption assisting, you can commence proceedings to wind up the debtor company.
What they are Required to do
Once served, the debtor company will have 21 days to do any of the following:
- Pay the amount claimed;
- Secure or compound for the debt;
- Request that the demand be withdrawn; or
- Make an application to the Court setting aside the demand.
If they pay, or reasonably secure or compound (enter into an arrangement to pay) for the debt, then the statutory demand is extinguished.
Lastly, they have four (4) main grounds for setting aside the statutory demand, they are:
- There is a genuine dispute as to the existence or amount of the debt; and/or
- They have a genuine offsetting claim; and/or
- There is a defect in the demand which is likely to cause substantial injustice; and/or
- Some other reason.
The bar for setting aside a statutory demand is quite low. All that a debtor needs to do is prove to that any of the above exist, and the demand will likely be set aside. If the demand is set aside, then the Court may order that the creditor pay the debtor company’s costs of the application.
Sunshine Coast Debt Recovery
The debt recovery process can be long and expensive.
In most cases the matter should be resolved without going to Court.
If the debtor simply refuses to pay then the creditor will have no choice but to commence debt recovery legal action to recover the debts, or simply write the debt off.