Our Debt Collection Guidelines

At Woods and Day Solicitor’s we have bespoke solutions for recovering your debt. We offer a variety of different strategies in recovering what is rightfully yours. If you have an issue with outstanding invoices or bad debtors, you have come to the right place – our lawyers are experts in the field.

 

Our Bespoke Letter of Demand

Our most popular service, due to its convenience and cost effectiveness; is our $49.50 (including GST) Letter of Demand.

Simply visit here and enter the relevant information pertaining to your debt. Our lawyers will be provided with the information you have supplied, and will immediately get to work drafting a personalised letter of demand under the Woods and Day letter-head.

We will print your bank account details on the letter so that if and when your money is recovered; there is no need to double-handle or hold your money on trust. It will go straight back to you. The debtor will have seven days in order to pay the money owed to our client.

 

Why is Letter of Demand important for a creditor?

Typically, we find the letter of demand service extremely effective in either recovering our client’s money at the first instance or else prompting a resolution in the form of a payment arrangement or negotiated outcome.

This is because receiving a letter from a reputable law firm is a signal of intent – the debtor will be made aware of the seriousness of the situation and in many cases will be wary of the threat of pending legal action.

Our letter of demand will have extra ‘bite’; drafted by one of our experienced lawyers under the Woods and Day letterhead – it will undoubtedly provide the best chance of recovering your money without resorting to legal action.

 

What if they ignore the letter or refuse to pay?

 

However, often the debtor will ignore or fail to respond to our letter. At the expiry of the seven-day period we will liaise with our client and enquire as to whether the debt has been paid.

If you still haven’t been paid; we will seek instructions from our client to commence formal legal proceedings by filing a Statement of Claim in the Local Court of Sydney.

 

What is a Statement of Claim?

A Statement of Claim is the equivalent of a formal document of demand – one that is actually filed in the Local Court. It is this step which commences formal legal proceedings. When you hear about people being “sued” – this will often be a reference to a Statement of Claim.

 

What needs to happen to have a Statement of Claim filed?

We will request further information from our client in order to have the most complete picture possible about the circumstances of the debt; and our lawyers will get to work drafting the Statement of Claim with the information you have supplied. Our lawyers are experts in debt recovery, contract disputes and commercial law, so you will be in good hands.

The Statement of Claim contains a twenty-eight day deadline by which the debtor must either file a defence to the claim or pay the debt.

 

How much does a Statement of Claim cost, and will it even be worth it?

Often one might see a quote for a Statement of Claim and believe that the cost isn’t worth the benefit. For example, the debt they are trying to recover is $5,000.00, and the legal costs may be something like $850.00 (just an example). The client may ask; “Is it really worth shelling out that sort of cash for such a debt?”

The answer is a resounding “Yes”. This is because in a Statement of Claim, not only will you be claiming the debt owed to you, but also the legal costs incurred in filing the Statement of Claim. 85-95% of these costs are recoverable. This means that you will be getting all of the debt owed to you back, and almost the entire amount of the legal costs back too.

In the event that the debt is not paid, we will again seek instructions from our client to enter Default Judgment.

 

What happens after the 28-day deadline and what is a Default Judgment?

If the 28-day deadline passes and the debtor still hasn’t paid, then we will be in touch again to ask for your instructions to enter a Default Judgment.

A Default Judgment is essentially a court order stating that the amount claimed in the Statement of Claim is due and payable. Again, the legal costs incurred in filing the Default Judgment are 85-95% recoverable.

However, the Default Judgment does not bring our client’s money to him/her automatically. It should be noted that the judgment does create adverse credit consequences for the debtor which may prompt eventual payment. A debtor may find it hard to get personal or business finance with a default judgment against his/her name.

 

Adverse credit is good, but how do I actually get my money back if they still haven’t paid?

If the client requires a more immediate recovery of his/her money; we will seek instructions to enforce payment of the debt through the most appropriate means available; of which there are multiple options.

We can file a Writ for the Levy of Property (again, 85-95% of the legal costs are recoverable), which will allow the Sheriff to forcibly seize the debtor’s property to sell and satisfy the debt.

Another option is to enforce the payment of the debt by way of a Garnishee Order, whereby the Court will make an order which would allow our client to recover money from the debtor’s bank account. It should be noted that the costs of enacting this enforcement mechanism are not recoverable.

To enforce larger debts against companies of more than $2,000.00, we can file a Creditor’s Statutory Demand, which allows the debtor twenty-one days in which to either pay the debt or else apply to have the demand set aside by the court. If the debtor fails to pay or respond to the demand we will seek instructions to have the company wound up in the Supreme Court.

The legal costs for both the Creditor’s Statutory Demand and the Wind-Up Proceedings are again 85-95% recoverable.

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