Debt Collection

Debt Collection needs to be done right the first time.  If proceedings are commenced with incomplete information, amendments will be required causing unnecessary delays.

Debt Collection needs to be done quickly.  We need to present promptly as it lets the debtor know that we do not lack resolve.  Quick action increases the chance of quick payment.

Debt Collection involves developing a strategy with the debtor.  It is often unnecessary to rack up legal costs when a settlement can be achieved without doing so.

Ultimately if the debtor refuses to pay and if you are convinced of that persons ability to pay, more aggressive strategies need to be put in place such as company wind ups and ultimately insolvency proceedings as a last resort.  The threats of these proceedings quite often result in payment of a debt and are an alternative to a lengthy and expensive Court proceedings.

We encourage you however to pursue the debt initially yourself in order to save on legal fees.  QCAT is a Tribunal established for that purpose – click here to visit the QCAT website.  We have provided a letter of demand which you can download as a Word document here and customise as to your own needs.  The important thing to remember is that your demand must:-

•    Confirm the nature of the debt;
•    Confirm that payment is now outstanding in accordance with your terms;
•    Provide for a cut off date for payment;
•    Warn the Debtor that if payment is not made, you will refer the matter to a solicitor without further notice and legal action will follow.

The letter is important as it could be used as evidence in court proceedings.

If the debt remains unpaid, you can then contact us to pursue more aggressive means and you have not unduly incurred substantial legal costs.

General Information

Before you engage the services of a solicitor you should make sure you have done the following to save you incurring expense unnecessarily:-
1.    Make sure you have sent detailed invoices of the amount due to the person who owes the money (the Debtor).

2.    We suggest you firstly send a “soft” letter.  This would be a polite reminder following up the debt, just noting it is overdue and even suggest that the Debtor contacts you to discuss a payment arrangement. Click here to see an example of a ‘soft letter’.

3.    You should make sure you provide a date such as 5.00pm on a date which is 14 days from the letter for the Debtor to reply.  Diary up that date.

4.    If you do not receive a favourable response then it is time to get serious and we suggest that you forward the letter on the link below (link to letter of demand).

5.    The Debtor by his/her inaction has drawn the line and it is difficult at this stage to reserve any business relationship however the Debtor will now see that you are serious about pursing that debt.

6.    Quite often a letter of demand is all it takes to get a positive response.

7.    Once again diarise the date for the response and if it is not favourable, at that stage you should engage us to act for you.

8.    There are various services which are able to provide you information regarding the assets of the debtor, whether an individual or a company.

9.    The debt enforcement procedure requires the issue of a Claim against the Debtor.  After the successful Hearing or in the absence of a Defence, the Judgement can be used to either instigate bankruptcy proceedings or a winding up petition against the company.  We can explain the details of these debt enforcement measures and their cost to you at that time.  As a general rule, the Debtor is responsible for payment of those costs once they enforced, however this will bring you no joy if the Debtor is without funds or insolvent.  It is most important that you conduct your own enquiries regarding the ability of any debtor to pay, failing which you are likely to expend considerable effort and cost chasing a debtor who has no funds.