Debt 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 →

Unpaid school fees can cause a strain in the relationship between the school and parents and guardians. The school is often left in a difficult position where the desire to educate children competes with the financial viability of running the school. There are however, a few simple steps that can be taken to resolve conflicts about unpaid school fees between the school and parents and guardians.

1. Telephone Discussions – Informal discussions are an undervalued tool in resolving fee disputes. Whilst it may be more convenient in the short term to send statements to parents and guardians, a quick conversation with the parents and guardians can help to identify the underlying issues which are preventing payment. Smaller issues can be addressed quickly and efficiently so that the school fees are paid without the need to escalate the non-payment. Larger issues can be referred to a solicitor for consideration of the most efficient and cost effective forward in rectifying the non-payment.
2. Payment Plans – Breaking down the payment of school fees into smaller, more manageable amounts can do a world of good for parents and guardians who struggle with lump sum payments. It also gives the school peace of mind in knowing that the fees will be paid without having to chase parents and guardians for payment on a constant basis.
3. Deeds – Second only to Terms of Enrolment, Deeds are the single most useful agreement for schools in recovering school fees. Deeds can be easily incorporated into the package of enrolment documents provided to parents and guardians. A properly drafted Deed can be set out in easily understood English rather than legal jargon. Depending on the terms of the Deed, a Deed will provide the school with enforceable legal rights at a much reduced cost in comparison legal proceedings.

The options above are just a few ways in which the school can recover its unpaid legal fees whilst preserving the relationship with parents and guardians. For help with any of the informal recovery methods listed above, contact the Debt Recovery team at Matthews Folbigg on 9635 7966 [...]  READ MORE →

Terms of Enrolment are often thought of as a mere form in an enrolment pack. The value of Terms of Enrolment go beyond this: correctly drafted agreements are fundamental to establishing enduring relationships between your school and potential parents and guardians. This the case where the Terms of Enrolment set the expectations for your school and the parents and guardians so that if things do go wrong, there is no ambiguity about the rights and responsibilities of your school in recovering fees and continuing education. [...]  READ MORE →