St. Clair & Associates are experts in debt recovery. Whether yours is a small and straightforward claim or a complex matter, we take a tailored approach to each matter to ensure that the merits of your claim shine, and that your money is recovered as quickly and economically as possible.
When accounts become overdue and your attempts to make your clients or customers pay have failed, debt recovery is the next step for businesses who insist on getting paid. By engaging an experienced debt recovery firm, you convey a strong message to your debtor that you are serious about getting paid.
Assessing Your Claim
Whereas many businesses have recurring types of claims that are well understood, the grounds on which your debtor has failed to pay can vary. Because of this, it is important to undertake an assessment of not only the strengths of your own claim, but how any matters raised by your debtor might affect your entitlement (or how it is perceived by a Court).
We take our responsibility to give well thought-out legal advice seriously, and provide you with the considerations you need to make decisions about your recovery strategy in an informed manner.
Letters of Demand
A letter of demand is one of the most important first steps in the debt recovery process, and can set the tone for your claim and your chances of you getting paid. This is why at St. Clair & Associates we do not issue generic “pay now” letters.
Instead, we take the time to eloquently advocate your entitlement by reference to the relevant contractual terms and circumstances justifying your entitlement to be paid.
Commencing Legal Proceedings
The objective in commencing legal proceedings is to obtain a settlement or judgment as quickly as possible.
In our experience, the commencement of proceedings itself prompts many debtors to pay their accounts in full, or establishes a willingness to engage in settlement negotiations.
In NSW, a defendant generally has 28 days from service of a statement of claim to file a defence, failing which a plaintiff is entitled to apply for default judgment.
Not only does commencing proceedings signify that you are confident in your entitlements and are not content to be overlooked, it also brings other pressures to bear on defendants that can strongly motivate them to satisfy your claim: the prospect of having to pay your costs, the prospect of having a judgment recorded on their credit reference report, or the prospect of having to disclose the litigation to a financier in applying for business loans.
Where a matter is defended and not settled earlier, it will proceed for hearing before the Court. The Local Court of NSW has time standards for the resolution of matter which provide that “the court’s time standards aim to finalise 90% of civil proceedings within 6 months of commencement and 100% within 12 months.”
FREQUENTLY ASKED QUESTIONS
What happens after a Letter of Demand has been sent?
A letter of demand specifies a date for payment, often 14 days.
If payment has not been received within the allotted timeframe, or any settlement negotiations are unsuccessful, you need to decide whether to instruct us to commence proceedings on your behalf.
If you decide to commence proceedings, we will draft a statement of claim for filing with the Court and service on your debtor.
What happens if my debtor files a defence within the 28 days from time of service?
In NSW, a defendant to legal proceedings generally has 28 days from service of the statement of claim to file a defence. If they fail to do so, a plaintiff is able to apply for default judgment.
If a defendant, before the entry of a default judgment, files a defence, then the Court manages the matter towards a final hearing and determination of the matter.
Parties are able to, and very often do, settle proceedings without the need for a final Court hearing.
In broad terms, the parties would need to prepare and serve their affidavit evidence, seek relevant documents from each other and third-parties and prepare the matter for argument before the Court.
If you decide to commence proceedings, we will draft a statement of claim for filing with the Court and service on your debtor.
Can interest be added to the amount owed to me?
You can include a claim for interest on an outstanding debt unless you have an agreement with the debtor that no interest will be payable.
If you have a contract with the debtor that specifies a rate of interest, you should include that as part of your claim, and you have a contractual right to that money.
If your contract or arrangement with the debtor does not prescribe a rate of interest, you can still claim interest, but this is limited to standard Court rates. This is generally 4% above the Reserve Bank Cash Rate (for any time before judgment) and 6% above the Reserve Bank Cash Rate (for any time after judgment).
What happens if my debtor doesn’t pay even after a default judgment?
Although a monetary judgment is a Court order that a debtor pay the judgment sum, this does not necessarily move all debtors to promptly pay.
This is the reason for the availability of various enforcement processes including:
- Garnishing amounts owed by third-parties to the debtor (such as a bank for amounts in a savings account or an employer for wages);
- Having the Court issue a writ for the levy of property, under which the Court will order the Sheriff to attend the debtor’s premises with a view to identifying and seizing property that could be sold to satisfy an outstanding judgment; and
- Examination processes, which are used to find out details of the debtor’s financial position and bank accounts.
Although not strictly-speaking an enforcement process, a judgment creditor can also pursue personal bankruptcy proceedings (against an individual) or winding up proceedings (against a corporation).