by Katrina Brown | Oct 14, 2013 | Commercial Law, Debt Recovery
So you have an outstanding debt and you would like to collect it?
Your letters to the debtor have not brought about payment. You are at a loss as to what to do next – should you refer your debt to a collection agency? Should you seek assistance from a lawyer?
This article will attempt to dispel some common myths about mercantile agencies, debt collection agencies and lawyers, and will help you to decide the best step forward for your business and its debt recovery strategies.
Myth One: Lawyers are only for when you want to sue someone!
Many people believe that initial debt recovery steps must be performed either in-house, or through a debt collection agency, and that lawyers must only become involved where it becomes time to take a debtor to court.
While it is true that lawyers are often involved in debt recovery litigation, Nautilus Law Group believes that it is cost effective and efficient for our clients that we provide a “one-stop” debt recovery service that allows a client the best opportunity to recover their debt amount.
As such, Nautilus Law Group has the resources to provide you with initial collection services charged on a per item basis. We can work closely with you to formulate a strategy for recovery of debts which is suited to the particular circumstances of your business, which may include demand letters, telephone demands or arranging field calls.
Myth Two: I can’t afford a lawyer!
Traditional debt collection agencies will often charge a collection fee based on a commission, or a percentage of the recovered debt. Nautilus Law Group believes that your costs associated with recovery of the debt should relate to the amount of work performed by us, and not to the size of your debt!
Nautilus Law Group is a small business, and understands the importance of being able to plan for expenses. Nautilus Law Group does not charge a collection fee or percentage of amount collect as you would encounter if you took your debt to a traditional collection agency. We work with you to provide a fixed fee schedule for all initial collection services so that you always know what the cost will be to your business.
We provide our clients with a “Strategic Plan” for their debt recovery, which outlines all fixed-fee costs associated with the litigation process. To the extent that we cannot provide a fixed fee estimate (such as on a file which is defended by the debtor), we will always aim to provide you with an accurate estimate of the costs associated with the next step in the process.
If you have exhausted traditional debt recovery options (or if you prefer the aggressive approach) and want to proceed to litigation, we are here to assist you. The Court applications we recommend to our clients are governed by the Uniform Civil Procedure Rules 1999. In the legislation is a scale of costs that the Court considers reasonable professional fees for the cost of issuing items such the Claim and Statement of Claim, Judgment and Enforcement proceedings. These Court-approved amounts are the amounts that Nautilus Law Group charges its Clients and the amounts we seek to recover from the debtor.
Myth Three: Legal fees are not recoverable – I may as well just write off my debt!
As discussed above, Nautilus Law Group charges scale fees to our clients where possible – which are the fees already deemed reasonable by the Court. This means that in the event that we were to proceed to Default Judgment or Summary Judgement on a matter, we are more likely to recover the majority, if not all, of your costs associated with the litigation.
Filing fees to the Court and a portion of the service fees are also recoverable from the debtor. Interest, whether it is an amount you are entitled under your contract or an amount provided for under legislation, will be added to your debt amount and will continue to accrue until full payment is received.
Does that mean that this won’t cost me anything? No. Unfortunately, some costs will be incurred for the day to day management of the file. Not all matters proceed directly to Judgment. When a Defence is received on a matter, time must be spent responding to the Defence and preparing for Trial if necessary. Defended matters incur costs which are not fully recoverable and are not provided for by the Court in the scale fees. Nautilus Law Group strives to provide the most effective advice while being conscious of costs.
Interest that is recoverable under contract or by statutory right is intended to be ‘compensatory’. This means that interest is imposed to assist in compensation for any out-of-pocket expenses that are incurred in attempting to resolve the matter which are not otherwise recoverable if the file moves to Judgment.
At Nautilus we strive to be transparent in our costing and will provide to our clients our Strategic Plan which outlines the costs of our services for every step of a debt recovery matter. We provide our client’s options in pursuing the debt and always consider the amount of the debt, the likelihood of the debt being recovered and costs of pursuing the debt. We believe in providing commercial strategies for your business.
If you would like to enquire about collecting your outstanding debt, we welcome you to contact our offices on (07) 5574 3560 or email info@nautiluslaw.com.au. We thank you for considering Nautilus Law Group.
Submitted by: Nautilus Law Group
by Katrina Brown | Mar 14, 2013 | Body Corporate Law, Commercial Law, Debt Recovery, Litigation Process
You have a debt you want recovered – we can help with that! We do not want to waste your time or money – so in order to fast track the process to allow us to sue someone for a debt (remember we have a 24 hour turn around time on new referrals, and 8 hours if all materials are turned over at the time of referral), we need each of the following provided with your referral (scanned copies are more than sufficient):
1. Completed Credit Application, including any Terms and Conditions and/or Guarantee(s);
2. Invoices;
3. Current Statement of Account; and
4. Any relevant correspondence between the you and your debtor.
Importantly, if there is a history of a dispute over the debt – for example, the debtor says that you did do “something” and so the debtor disputes your debt, then let us know this as well. The last thing we want to do is push your demands against a debtor, when the fall out could be the debtor has a claim against you. With the Australian Consumer Protection Laws as they are – it always helps to ensure we have you covered off in terms of reviewing such disputes before pushing debt recovery. There may steps necessary to take before debt recover to ensure compliance with the Australian Consumer Protection Laws – after which you can move aggressively into the recovery process. This is a rarity in our practice – but even one instance is too much if you are the one being investigated by the Fair Trade Office.
As our Strategic Plan provides, once we have your completed materials, you can elect a 24 hour demand, 48 hour demand, 7 day demand, 14 day demand or alternative demand process, before proceeding to legal (if required). We find proactively addressing debtor claims, ensures payment before legal proceedings are required. For those more difficult cases, we are positioned and offer court scale fee based legal proceedings with efficiency and transparency.
If you have any questions about our recovery process, we welcome you to contact our offices on (07) 5574 3560 or email info@nautiluslaw.com.au. We thank you for considering Nautilus Law Group..
Submitted by: Nautilus Law Group
by Katrina Brown | Feb 6, 2013 | Body Corporate Law, Commercial Law, Debt Recovery, Litigation Process
Prior to obtaining Default Judgment, a Claim and Statement of Claim must be filed with the Court on behalf of the Creditor outlining the relationship between the Creditor and the Debtor, the history of the supply of goods or services forming the basis of the Debt Claim, and the amounts outstanding and due (including interest and costs).
The Claim and Statement of Claim must be served on the Debtor (known in the legal documents as a Defendant”. Once the Claim has been served, the Defendant then has 28 days to file a defence or make payment. Quite often, a Debtor will contact our Team to ask for a payment plan. You are free to accept a payment in full (and you can require as a condition the payment of your legal fees), you can accept a payment plan (but are not required) or you are free to allow the matter to stand without prosecution (not recommended).
If there is, however, no contact from the Debtor and/or contact the Debtor provides no Defence, you are in a position to apply for a Default Judgment.
Obtaining a Default Judgment against a Debtor may be the only way to recover what is owed to you. A Default Judgment is an Order provided by the Court, and the Order sets out the amount outstanding owed to the Creditor. Your legal fees (as assessed at Court Scale) are usually granted in the Order.
To apply to the Court for Default Judgment, certain conditions must be present:
– The Defendant must have been served, with greater than 28 days lapsing between service and the date intended to lodge for Default Judgment; and
– No Defence (or Conditional Defence) has been lodged.
Once the Court has granted the Application for Default Judgment, a copy of the sealed Judgment is returned to our Team and we then consult with you to determine what enforcement procedures you wish to take.
We are instructed Credit Reference Agencies receive copies of all lodged Judgments, which gives added pressure to Debtors because their ability to continue credit facilities with their banks and lenders is often impacted, and most certainly they have difficulty in obtaining further credit with an unsatisfied Judgment on their Credit Report.
We welcome you to contact our team on (07) 5574 3560 or email us info@nautiluslaw.com.au. Thank you for considering Nautilus Law Group.
Submitted by: Nautilus Law Group
by Katrina Brown | Feb 3, 2013 | Commercial Law, Debt Recovery
Obtaining Judgment against a Defendant is a step in the process of recovering monies from a debtor – but not the end in many cases. A Judgment is valid for 12 years from the date on which the Judgment is granted. Judgment will adversely affect a debtor’s credit rating; however, that does not mean that your debtor will automatically pay.
Thankfully, there are further options available to the creditor to pursue the recovery of the debt monies.
Enforcement Warrants:
Under the Uniform Civil Proceeding Rules 1999, a Judgment Creditor can make an application to the Magistrates Court for an enforcement warrant to recover a Judgment, including interest at the statutory rate. Enforcement warrants can be issued by the Court for the seizure and sale of the debtor’s property, redirection of a debtor’s wages, and even the redirection of a debt owed to the debtor by a third party to be paid to the Judgment Creditor.
Winding Up:
If the debtor is a corporation and the debt amount is at least $2,000.00, “Winding Up” (otherwise known as involuntary liquidation) is an option. The Winding Up process involves having the corporation deemed insolvent and placed into liquidation. An Administrator is appointed and the company’s assets are assessed and distributed among the company’s creditors, including the Judgment Creditor.
As a last resort, we take more drastic measures…
Bankruptcy:
If the debtor is an individual and the debt amount is at least $5,000.00, Bankruptcy is an option. A Trustee is appointed to collect and distribute the Bankrupt’s Estate, and in the process the Judgment (in whole or part) is satisfied.
In the coming weeks we will address each of the above enforcement options in greater depth providing a review of the process and timelines involved.
Stay Tuned!
We welcome you to contact our offices on (07) 5574 3560. We thank you for considering Nautilus Law Group.
Submitted by: Nautilus Law Group
