Debt Recovery - To Sue Or Not To Sue
Date: September 03, 2008
Authors: LAC Lawyers
Imagine this situation.
Your regular Customer calls you and request delivery of some goods in store. A delivery order and an invoice for the goods are raised and the goods are promptly delivered the next day to the customer. The delivery order is acknowledged and invoice handed over your customer with a thirty day credit period. Thirty days lapses and the customer failed to make payment. Despite various reminders, the Customer still refuses to pay the outstanding amount. That regular customer has now become a debtor of your company.
What can you do?
Your first step is to instruct a solicitor to send a letter of demand to the Customer informing them of the contract entered between the parties and the money outstanding, and giving them a period within which to pay the outstanding sum due or face further legal action. It is wise to have a solicitor do this as care must be taken in drafting a letter of demand as a defective letter of demand could result in complaints being made against you for harassment.
In a matter where the debt is owed by a company, you can instruct your solicitor to issue a statutory demand if you receive no proposal of settlement or response from the letter of demand. A statutory demand is similar to a letter of demand but it states that the debtor has 21 days to pay the entire amount to your satisfaction failing which you could take steps to wind up the company.
Your customer’s options upon receipt of the demand
The customer may contact you to settle the entire outstanding amount or negotiate a payment arrangement to settle the entire amount due and owing to you together with your legal costs and interest and this in effect would bring the entire episode to an end without the need to proceed with further legal proceedings.
Or
Your customer continues to disregard your demand and refuses to pay. At this point in time if the debtor does not respond to your written request/demand you may consider taking further legal action.
Legal Proceedings
If you wish to recover your debt through legal proceedings you should certainly seek the advice of a solicitor experienced in this field such as LAC Lawyers. They have the skills and experience to guide you through the court process to gain a successful outcome.
The commencement of the proceedings is dependant on the amount due and owing to you and the main court dealing with debt recovery matters are:
- The civil jurisdiction of the Local Court is divided into 2 divisions. The Small Claims Division deals with claims that are less than $10,000 and The General Division deals with claims over $10,000 but less than $60,000;
- The District Court of NSW deals with debts not exceeding $750,000.
- The Supreme Court of NSW deals with debts over $750,000.
LAC Lawyers is ready and willing to fight for your rights and represent your interests to achieve the best result. Call us on 1300 799 888 for a consultation to consider your options.