Debt Recovery
Do you have five or more debts?
The success of almost every business is dependent upon it carefully managing its cash flow. This is necessary to make a profitable business even more profitable and to assist a struggling business to survive. If debtor accounts are allowed to remain outstanding beyond your normal trading terms then your cash flow will suffer. The longer accounts remain outstanding the greater the risk that you may never be paid at all. In the current financial times, businesses need to be careful that they do not allow their debtors to exceed acceptable limits. If you are owed money by a company that enters into administration or liquidation or in relation to which you have insolvency concerns, or by an individual who enters into bankruptcy, the value of your debt may be reduced substantially or it may disappear entirely. If you take action a sufficient time before that occurs you increase your prospects of recovering the entirety of the debt. It is often the creditor which presses hardest for payment that is most likely to be paid.
At DSC Lawyers we provide a comprehensive and prompt debt recovery service. We deal with your debtors in the manner that you wish, which may be in a manner that retains the prospects of you keeping them as a customer after the debt is paid or which may be in a manner that is non-compromising.
Unless you wish us to allow your debtors additional leeway, we generally progress debt recovery matters for our clients by first sending a letter of demand requiring payment within 7 days. If payment is not made within that timeframe then legal proceedings are promptly issued and served on the debtor. Perhaps the most common Court for debt recovery matters in Victoria is the Magistrates Court, so the proceedings are usually issued in that Court. After service of Magistrates Court proceedings, the debtor will usually have 21 days within which to file a defence or to make payment. If there is no defence and no payment, we then promptly enter judgment in default of defence, also known as a “default judgment”, against the debtor.
After entering default judgment, we usually send another letter of demand requiring payment within 7 days. If payment is not made, we then seek your instructions in relation to what recovery action to take. It is often preferable to issue a Warrant to Seize Property, a Creditors Statutory Demand (for companies) or a Bankruptcy Notice (for individuals). We then follow through with your desired course of recovery action promptly and efficiently. We seek to recover your business debts as efficiently as possible in the shortest possible timeframe. When your business has supplied services or delivered goods then it deserves to be paid.
Hint: If you wish to continue to trade with a defaulting debtor we suggest that you only trade on cash terms or after putting in place appropriate security documents such as personal guarantees from directors or even security over property. The team in the contracts and agreements department can assist with these documents.
Do you have five or more debts?
Clients with five or more debt recovery matters may be eligible to participate in our monthly billing program – an innovative approach to legal costing for debt recovery matters. Many law firms charge their clients for debt recovery matters at an hourly rate for their professional costs – this is how we also charge for those who are not a part of our monthly billing program. For those who are eligible, they can choose to be charged a fixed monthly fee for professional costs. The monthly fee is calculated based upon a number of factors including the number of debt recovery matters current for a client on the first business day of each month. Although other factors are also considered, generally the more debt recovery matters you have, the less your business pays per month for professional costs for each debt recovery matter. Only debt claims of up to $100,000.00 that can be issued in the Magistrates Court can be included in the monthly billing program and claims cease to be included in the program if their status changes from debt recovery to litigation.
You can start a debt recovery matter now: Complete our online enquiry form
Links
- Australian Business Register: Australian Government website where you can access publicly available information relating to businesses to see whether your debt is owed by an individual, a company or by some other entity
- Magistrates Court of Victoria: The website of the Victorian Court where the majority of debt claims seeking to recover $100,000.00 or less are determined
- County Court of Victoria: The website of the Victorian Court where the majority of debt claims seeking to recover over $100,000.00 are determined
