The Debt Collection Legal Process and Services for debt recovery

What is involved in litigating for a debt?

Although ideally we would be able to collect all debts using only very simple and cheap methods, the reality is that some debtors need to be dealt with through legal process and will only respond when the sanctions of the law are involved in a debt collection process.

High level overview of the process

The debt collection legal process begins at the point where it is no longer possible to recover the debt through phone calls or written representations sent to the debtor and it is now necessary to take legal action in relation to the matter. The initial aspects of legal action generally involves issuing a statement of claim. If the matter is undefended then you will be able to move for default judgment generally after 28 days in NEW South Wales. This also opens the way for enforcement and recovery actions in relation to garnishee of wages and repossession of property. Finally, if the company or person which is not paying has become insolvent, the final step in the debt collection process is to pursue bankruptcy proceedings or in the case of a company, winding up.

Debt Collection Process for Personal Debts

Debt Collection Process for Business Debts

It depends on the size of the debt

The initial filing of a debt collection claim will vary based on the amount involved. For instance, in New South Wales, the local court will hear matters of up to $10,000.00 and then a matter will be referred to the District Court for matters up to $750,000.00 and matters above this amount will be heard in the Supreme Court.

Size of debts that you should pursue legally

If a debt is over $1000.00 then you would start to get to a level where you would think about hiring a lawyer for the recovery of this debt. Normally, if the amount is below this then the legal fees which will accrue will run up so quickly that it will not be worth pursuing. However, any debt larger than this and the choice of not pursuing the debt could prove more expensive than choosing to ignore it. If you have an efficient and effective lawyer, they will give you an excellent return on investment.

What are some cost effective legal services to use?

If you have a question about the debt collection process, we recommend that you enter your question into the box below to obtain further advice. Also, if you would like a get a free initial assessment of your debt collection matter, fill out the form to the right.

Debt Collection Letter Resources