By Ewurama Appiah a Law Clerk at Matthews Folbigg in the Insolvency, Restructuring and Debt Recovery Group
Do you have a debt to collect and are you unsure in which court to file your claim? Read on to find out more information on the steps you should take to ensure you maximise your ability to recover that debt!
Debt recovery through the courts is largely regulated by state and territory law and the procedural rules of the courts. Recovery of debts may include the repossession of assets or other legal enforcement of security interests.
In New South Wales, it is imperative that creditors choose the correct court in which to file their claims in. The Courts within the state operate under different monetary limits, therefore it is important that you file your claim in a Court that is suitable for your debt.
1. Claims of up to $20,000 – The Local Court hears civil disputes for claims up to $100,000 and with two different Divisions to hear such claims. The Small Claims Division hears claims up to $20,000 and the General Division hears claims over 20,000 but under $100,000. There are special circumstances under which debt collection of up to $120,000 can be heard in the Local Court.
2. Claims between $100,000 and $750,000 – When collecting money which is over $100,000 but less than $750,000, proceedings should be commenced in the District Court. The District Court however can hear civil claims of up to $1,250,000 in exceptional circumstances.
3. Claims of $750,000 or more – When collecting debts that exceed $750,000, claims should be filed in the Supreme Court.
What happens if I file a claim in the wrong Court[EA1] ?
If you file a claim in the wrong court, unless the proceedings are transferred you may not be able to receive the full amount of your claim. It is important to seek legal advice so that your debt collection can be maximised.
If you would like assistance with choosing the right court in which you should file a debt recovery claim, Matthews Folbigg Lawyers is capable of providing you with such assistance.
Matthews Folbigg Lawyers has a specialist team dedicated to Insolvency, Restructuring and Debt Recovery. If you would like more information or advice in relation to Insolvency, Restructuring or Debt Recovery practice and procedure, please contact Stephen Mullette or Jeffrey Brown on (02) 9806 7459 or (02) 9806 7446, or email stephenm@matthewsfolbigg.com.au or jeffreyb@matthewsfolbigg.com.au
