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
