Are you owed money, or is someone chasing you for a debt? At Kor Legal we can recover your debt, fast. We provide tailored solutions for each client that help you make an informed decision on the prospects of successfully recovering the debt, so you are not throwing good money after bad. We can also provide advice on challenging a claim made against you. We can help with all steps of the debt recovery process including:
- Drafting and responding to letters of demand
- Preparing and managing payment plans with debtors
- Preparing and serving statutory demands and managing the process
- Commencing or defending proceedings in New South Wales Courts
- Enforcing judgments
The Debt Recovery Process
As most business owners know, making money is one thing, ensuring that you are paid is quite another. Particularly in small businesses, financial viability can be heavily dependent upon whether accounts are paid promptly. A business can often recoup an outstanding account with a friendly reminder. When informal methods fail to work, the next step may be to outsource the job to a lawyer. The most viable option used to try to recover a debt will depend on various factors, for example:
- The legal nature of the debtor – individual, partnership, company, etc. – it is important to properly identify the ‘real’ debtor.
- The amount owed and how long it has been outstanding.
- Whether the debt is disputed and, if so, the reason claimed for non-payment.
- The solvency of the debtor and the likelihood of the debtor being able to pay the creditor, even if the creditor is successful in its claim.
- Whether recourse to the personal assets of an individual or company director may be available to satisfy a debt.
Letters of Demand
A letter of demand is often the first step, and less expensive means of pursuing an unpaid debt. The letter can be drafted and come from the debtor or its legal representative. The demand should clearly state the amount owed, what it relates to, and how, when and where money should be paid. The letter should also threaten legal action (including a claim for the recovery of legal fees) if the debt is not paid by a specified date.
Court Proceedings
Issuing court proceedings incurs legal and court filing fees, so it is important to consider the amount due and the likelihood of obtaining and enforcing a judgment made in the creditor’s favour. It is essential to ensure that the appropriate court and court processes are used, the debtor is correctly identified, the facts are properly set out in the statement of claim or summons, and relevant evidence is available to support the claim. Retaining a lawyer experienced in debt recovery is advisable and will likely avoid costly mistakes by ensuring the most effective course of action is taken.
Statutory Demands
Insolvent trading is prohibited by the Corporations Act 2001 (Cth). A creditor may issue a statutory demand on a company that owes more than the statutory minimum (currently $2,000), the effect being that the company may be presumed insolvent if it fails to respond to the demand.
Statutory demands must comply with strict criteria. They must be in the prescribed format and correctly served on the debtor company to ensure their validity and to avoid potential costs orders being made against a creditor.
Once a valid demand is properly served, a presumption of insolvency arises if, after 21 days the debtor fails to pay the debt or have the statutory demand withdrawn by the creditor or set aside by a court.
Essentially, a statutory demand can exert pressure on a company to respond to a claim in order to avoid insolvency proceedings – whether that be to pay the debt in full, negotiate a payment plan, or defend the matter in court. If the demand is ignored the creditor may file an application to wind the company up.
If somebody owes you or your business money, it can be frustrating trying to recover those funds. There are different ways to pursue an unpaid debt and it is important to choose the method most likely to produce the best result in the circumstances. We can help you determine the most appropriate and cost-effective solution to recover your outstanding debts and, to the fullest extent possible, repayment of your costs in doing so.
We can also help draft your terms of trade and to implement credit control practices to help your business proactively minimise bad debt and improve cashflow.
If you need assistance, contact one of our lawyers at [email protected] or call 02 9159 9084.
Are you owed money, or is someone chasing you for a debt? At Kor Legal we can recover your debt, fast. We provide tailored solutions for each client that help you make an informed decision on the prospects of successfully recovering the debt, so you are not throwing good money after bad. We can also provide advice on challenging a claim made against you. We can help with all steps of the debt recovery process including:
- Drafting and responding to letters of demand
- Preparing and managing payment plans with debtors
- Preparing and serving statutory demands and managing the process
- Commencing or defending proceedings in New South Wales Courts
- Enforcing judgments
The Debt Recovery Process
As most business owners know, making money is one thing, ensuring that you are paid is quite another. Particularly in small businesses, financial viability can be heavily dependent upon whether accounts are paid promptly. A business can often recoup an outstanding account with a friendly reminder. When informal methods fail to work, the next step may be to outsource the job to a lawyer. The most viable option used to try to recover a debt will depend on various factors, for example:
- The legal nature of the debtor – individual, partnership, company, etc. – it is important to properly identify the ‘real’ debtor.
- The amount owed and how long it has been outstanding.
- Whether the debt is disputed and, if so, the reason claimed for non-payment.
- The solvency of the debtor and the likelihood of the debtor being able to pay the creditor, even if the creditor is successful in its claim.
- Whether recourse to the personal assets of an individual or company director may be available to satisfy a debt.
Letters of Demand
A letter of demand is often the first step, and less expensive means of pursuing an unpaid debt. The letter can be drafted and come from the debtor or its legal representative. The demand should clearly state the amount owed, what it relates to, and how, when and where money should be paid. The letter should also threaten legal action (including a claim for the recovery of legal fees) if the debt is not paid by a specified date.
Court Proceedings
Issuing court proceedings incurs legal and court filing fees, so it is important to consider the amount due and the likelihood of obtaining and enforcing a judgment made in the creditor’s favour. It is essential to ensure that the appropriate court and court processes are used, the debtor is correctly identified, the facts are properly set out in the statement of claim or summons, and relevant evidence is available to support the claim. Retaining a lawyer experienced in debt recovery is advisable and will likely avoid costly mistakes by ensuring the most effective course of action is taken.
Statutory Demands
Insolvent trading is prohibited by the Corporations Act 2001 (Cth). A creditor may issue a statutory demand on a company that owes more than the statutory minimum (currently $2,000), the effect being that the company may be presumed insolvent if it fails to respond to the demand.
Statutory demands must comply with strict criteria. They must be in the prescribed format and correctly served on the debtor company to ensure their validity and to avoid potential costs orders being made against a creditor.
Once a valid demand is properly served, a presumption of insolvency arises if, after 21 days the debtor fails to pay the debt or have the statutory demand withdrawn by the creditor or set aside by a court.
Essentially, a statutory demand can exert pressure on a company to respond to a claim in order to avoid insolvency proceedings – whether that be to pay the debt in full, negotiate a payment plan, or defend the matter in court. If the demand is ignored the creditor may file an application to wind the company up.
If somebody owes you or your business money, it can be frustrating trying to recover those funds. There are different ways to pursue an unpaid debt and it is important to choose the method most likely to produce the best result in the circumstances. We can help you determine the most appropriate and cost-effective solution to recover your outstanding debts and, to the fullest extent possible, repayment of your costs in doing so.
We can also help draft your terms of trade and to implement credit control practices to help your business proactively minimise bad debt and improve cashflow.
If you need assistance, contact one of our lawyers at [email protected] or call 02 9159 9084.
