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Debt Recovery – Obtaining Admission from Debtors

OBTAINING ADMISSION FROM DEBTORS

Creditors are frequently frustrated with the time it can take to prosecute defended debt recovery proceedings in court.

Debt recovery proceedings can take somewhere usually between 6 to 24 months before obtaining a judgment against the debtor. However, in the recent case of Mary Antoinette Aviani v Jennifer Loh [2022] NSWSC 658 a creditor was able to obtain a judgment much earlier on in the debt recovery proceedings based on admissions the debtor conceded at an interlocutory hearing.

De facto partners were in a dispute regarding contributions towards the purchase of jointly owned property. The Plaintiff sought and obtained an injunction against the Defendant restraining property dealings. The matter next came before Kunc J where the injunction was modified. The Defendant required access to funds to conclude a property purchase. [...]  READ MORE →

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Filing Fee Rise!

By Hayley Hitch, a Senior Associate of Matthews Folbigg Lawyers in our Insolvency, Restructuring and Debt Recovery Group.

There has been a minimal increase in the costs associated with filing documents in the State’s Courts over the past 3 years whilst the country was dealing with the financial ramifications of COVID-19. However, a rise has been imminent.

The NSW Attorney-General has now considered the costs associated with commencing and running proceedings within the Courts of New South Wales and upon evaluating such costs has enacted the Civil Procedure Amendment (Fees) Regulation 2022 (NSW). [...]  READ MORE →

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A PERMANENT INCREASE OF THE BANKRUPTCY THRESHOLD

By Anica Cunanan, Solicitor at Matthews Folbigg in the Insolvency, Restructuring and Debt Recovery Group

Is having a judgment against a personal debtor enough to serve a bankruptcy notice and bankrupt the debtor? Can you make a debtor bankrupt by serving a bankruptcy notice? What else do you need to know to bankrupt a personal debtor?

A creditor serving a bankruptcy notice is the first step to potentially making a debtor bankrupt. The bankruptcy notice must be based on a judgment against a personal debtor in an Australia court and be less than 6 years old. [...]  READ MORE →

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COLLECTING MONEY!

By Anica Cunanan, Solicitor at Matthews Folbigg in the Insolvency, Restructuring and Debt Recovery Group

Finding trouble collecting money? Matthews Folbigg Lawyers understand how challenging and delicate collecting money can be – especially, when you are collecting money from someone you know or alternatively, collecting money from someone to whom you are still providing goods and/or services.

At Matthews Folbigg Lawyers, we have demonstrated experience with collecting money from debtors who have had a business relationship breakdown with a creditor or alternatively, collecting money from debtors who continue to have business relationships with their creditors. Collecting money, no matter the dynamic between the creditor and debtor, can be a very delicate situation. [...]  READ MORE →

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Identifying the Debtor!

By Hayley Hitch, a Senior Associate of Matthews Folbigg, in our Insolvency, Restructuring and Debt Recovery Group.

Sometimes it can be difficult to identify who is your actual debtor…is it the company name placed on the application, is it linked to the ABN number on the application, or is it the individual who signed the application…?

One of the biggest mistakes creditors make when attempting to recover a debt is going after the wrong debtor. Although a credit application has been completed in its entirety it may not contain the necessary information to recover a debt from a customer. [...]  READ MORE →

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Does the PPSR matter anymore?

By Jeffrey Brown, a Principal of Matthews Folbigg, in our Insolvency, Restructuring and Debt Recovery Group.

It has now been over 10 years since the Personal Property Securities Register (PPSR) opened in Australia for the first time. When the PPSR went live in January 2012 Australia had for the first time a public ‘noticeboard’ of security interests in personal property, centralised on one database.

The number of new registrations on the PPSR reached a monthly peak in January 2014 when 281,010 new registrations were lodged. Since that time the number of registrations has seen a steady monthly decline, with the latest monthly figures showing 253 new registrations in March 2022 (ppsr.gov.au/about-us/news-engagement/ppsr-statistics). Is this a sign that the PPSR is being ignored by the companies and individuals that were supposed to be its key stakeholders? [...]  READ MORE →

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Statutory Demands for Debt Recovery: Risky Business?

By Bonnie McMahon a Senior Associate of Matthews Folbigg, in our Insolvency, Restructuring and Debt Recovery Group

Whilst a statutory demand may seem like a good debt recovery strategy, it is important for creditors to remember that there can be harsh consequences if they issue a statutory demand, which is later set aside by a court.

The recent Supreme Court decision of Rees J in In the matter of HWC Contracting Pty Ltd [2021] NSWSC 1684 (“HWC Contracting”), is a important reminder for creditors engaging in debt recovery that if a debtor successfully sets aside a statutory demand, it is likely the creditor will be ordered to pay the debtor’s legal costs. A fast simple debt recovery technique can end up become very expensive, and costs may even outweigh the debt recovery amount. [...]  READ MORE →

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Collecting Money: Which court should I pick?

By Bonnie McMahon an Associate of Matthews Folbigg, in our Insolvency, Restructuring and Debt Recovery Group

When collecting money from a debtor in NSW, it is important to ensure that you are collecting money in the right court.

  • Collecting money under $20,000 – When collecting money which is under $20,000, debt collection proceedings should be commenced in the Small Claims Division of the Local Court of NSW.
  • Collecting money over $20,000 but under $100,000 – When collecting money which is over $20,000 but under $100,000, debt collection proceedings should be commenced in the General Division of the Local Court of NSW. However, there are some circumstances where collecting money up to $120,000 can be done in the Local Court, although you will normally need the consent of the debtor.
  • Collecting money over $100,000 but under $750,000 – When collecting money which is over $100,000 but under $750,000, debt collection proceedings should be commenced in the District Court of NSW. However, like the Local Court, the District Court can hear debt collection matters up to $1,125,000, provided no party objects to the matter being heard in the District Court.
  • Collecting money over $750,000 – When collecting money over $750,000, debt recovery proceedings should generally be commenced in the Supreme Court of NSW.

What happens if you are collecting money by debt collection proceedings in the wrong court?

If you are collecting money in the Supreme Court and you obtain a judgment for less than $500,000, you may not be able to recover costs from the debtor, unless the Supreme Court is satisfied that commencing debt collection proceedings in the Supreme Court was warranted. [...]  READ MORE →

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KNOWING YOUR LIMITATIONS

By Anica Cunanan, Solicitor at Matthews Folbigg in the Insolvency, Restructuring and Debt Recovery Group

Has the COVID-19 pandemic affected your approach to debt collection? Have you deferred debt collection, or accepted payment arrangements on matters which you would have previously sent for debt collection? The last few years have certainly tested the limits of creditors’ willingness to defer debt collection. However with debt collection generosity comes the very real risk that some amounts may no longer be available for debt collection. When considering leniency with your debt collection, it is important to know your limitations. [...]  READ MORE →

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Overdue payment – lawyer or Debt Collector?

By Jodie Rodrigues, solicitor at Matthews Folbigg in the Insolvency, Restructuring and Debt Recovery Group

So you’ve found an outstanding invoice. Sure, all invoices are valuable to a business but now you’re considering whether there is any commercial benefit to asking a lawyer to chase the debt. There are real advantages in using a lawyer rather than a debt collector to assist with collection of your debts. There are three main questions you should ask when considering which invoices to chase through legal proceedings: [...]  READ MORE →

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The Schools Blog: Part 3 – The Fail Safe for Fee Recovery

There is an inherent difficulty in balancing the financial viability of a school with the desire to educate will often come to a head because educating the child is no longer possible. In such cases, it may be necessary to recover school fees through legal proceedings. This instalment of the blog series provides a short summary of the standard recovery process.

  1. Settlement – Negotiations over the terms of a settlement will often continue for the duration of the legal proceedings. Settlement does not mean complete compromise; it may simply mean that the parties have recognised that the cost of legal fees will mean that payment of the unpaid fees is more efficiently and economically resolved between the parties. Legal proceedings can sometimes be necessary to draw parents and guardians to that conclusion.
  2. Legal Letters – A letter of demand provides the parents and guardians with a final opportunity to make payment before Court proceedings are commenced. If drafted on the letterhead of a law firm, this letter will often elicit a response from the parents and guardians. This response may include information about their position as relevant to the commencement and resolution of legal proceedings and, in the best case, provide for the payment of the unpaid fees.
  3. Court Proceedings – Court proceedings are commenced by filing a Statement of Claim in which the school can claim the unpaid fees, interest and some of their legal costs. There are generally two avenues once the Statement of Claim is filed:
    1. Undefended proceedings – an inadequate (or no) response from the parents and guardians which leads to Default Judgment being awarded in favour of the school; or
    2. Defended proceedings – the debt recovery matter proceeds as a case before the Local Court.
    Enforcement – Once judgment has been made in favour of the school, there are several options available to obtain payment from parents or guardians including garnishing wages or existing bank balances, Court ordered payment plans and orders for the sale of personal property. The suitability of these options varies in view of the amount to be recovered and the school’s desire to maintain a relationship with student and their parents and guardians.

    In the interest of costs and maintaining relationships, the school should exhaust all informal recovery options prior to commencing legal proceedings. However, if your school is considering recovering its fees through legal proceedings, we invite you to contact the Matthews Folbigg on 9635 7966 and talk to our friendly Debt Recovery team about your options. [...]  READ MORE →