Debt Recovery

1. Demand Phase

This is the initial step in the debt recovery process. We begin by taking detailed instructions, including the nature of the debt, the debtor’s background, and any prior dealings.

We often recommend that clients discreetly make enquiries of the debtor’s assets at this stage, while they are likely unaware of potential legal action.

We then issue a Letter of Demand on your behalf. This formal notice sets out the amount owed and requests payment within a specified timeframe. A well-drafted demand letter is often an effective and inexpensive way to prompt settlement without needing to commence proceedings.

2. Commencing Proceedings

If the debtor fails to respond or pay, the next step is to commence legal proceedings. This involves preparing and filing formal pleadings, which is a legal document setting out your claim in detail.

In the ACT, the appropriate forum depends on the amount of the debt:

• ACAT (ACT Civil and Administrative Tribunal) – for claims up to $25,000.
  ACAT is a low-cost, informal jurisdiction designed for self-representation and quick resolutions. However, legal costs are rarely awarded, and unrepresented debtors can sometimes delay proceedings.
• Magistrates Court of the ACT – for claims over $25,000.
  This jurisdiction allows for the recovery of legal costs (on a party/party basis), and in appropriate cases, indemnity costs may be awarded. Proceedings here are more formal and more efficient when legal representation is involved.

3. Judgment

Our goal is for your debt recovery matter to be resolved without a court hearing. However, where a defence is filed or further action is required, our team will guide you every step of the way.

If judgment is awarded in your favour, it can include the principal debt, interest, and recoverable legal costs.

4. Enforcement

Once judgment is obtained, we take prompt enforcement action if payment is not voluntarily made. Options include:

• Enforcement hearings (to investigate the debtor’s financial position)
• Debt redirection orders (against bank accounts or other financial assets)
• Earnings redirection orders (against wages)
• Warrants of seizure and sale (against personal or real property)
• Bankruptcy proceedings (for debts over $10,000)
• Winding up applications (for corporate debtors)

5. Negotiation & Settlement

We can also negotiate with the debtor to achieve a commercially sensible outcome for you. This might include but is not limited to:

• Advising on the commerciality of settlement offers
• Drafting deeds of settlement
• Preparing a deed of acknowledgment of debt

Our goal is always to resolve matters promptly and cost-effectively.