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Debt Collection Sydney – Statutory Demands and the Expiration of the Coronavirus Economic Response Package Omnibus Act 2020 amendments

As a result of the COVID-19 pandemic, the Coronavirus Economic Response Package Omnibus Act 2020 (Cth) was introduced, which resulted in various temporary changes to the Corporations Act 2001 (Cth) and Corporations Regulations 2001 (Cth) in respect of statutory demands.

These temporary changes include extending the time period for a company to respond to a statutory demand from 21 days to six months, and increasing the monetary threshold for a creditor to issue a statutory demand from $2,000 to $20,000. [...]  READ MORE →

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Recovering costs for debt collection services

Recovering costs for debt collection services

Fees and costs, including legal costs and costs for third party debt collection services can only be collected from a debtor if there is an agreement between the creditor and debtor providing for those costs to be payable to the creditor. Attempting to recover costs in the absence of a clause in the relevant agreement can be misleading deceptive and conduct in contravention of section 18 of the Australian Consumer Law (Schedule 2 to the Competition and Consumer Act 2010 (Cth)), section 154 of the National Credit Code (Schedule 1 of the National Consumer Credit Protection Act 2009 (Cth)) as well as Section 12DA of the Australian Securities and Investments Commission Act 2001 (Cth) (“the ASIC Act”). [...]  READ MORE →

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Clearing your debtor ledger – Get in touch with your not too friendly Debt Collection Lawyer!

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

Do you hate debt collection? Do you have a list of debt collection tasks that is getting longer every day? Have you been unable to accomplish the critical debt collection part of debt collection? If only debt collection were easier, and there was some way of moving those pesky debtors off the debt collection ledger! And don’t forget the cashflow side of debt collection – wouldn’t you like to have a bit extra cashflow back in your budget? [...]  READ MORE →

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Responding to Debt Collectors

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

If you receive a letter of demand from a debt collector, you might be wondering what you should do and whether you should respond to the debt collector. We have set out four helpful tips below which might assist you to respond to debt collector correspondence.

  1. Do not ignore the debt collector!

Whilst it might be daunting or scary receiving a letter of demand from a debt collector, you must ensure that you read the letter of demand and consider the claim being made against you. If you do not respond to the demand, it is likely that the debt collector may proceed with commencing proceedings against you. Debt collector proceedings and judgments can have unintended consequences, including being recorded on your credit profile, or leading to bankruptcy, so it is important that you take steps to deal with the debt collector’s claim as soon as possible. [...]  READ MORE →

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OPPOSING PREFERENCE PAYMENT CLAIMS AFTER COLLECTING MONEY

Claims by a liquidator for monies to be repaid to a company now in liquidation are unfortunately for most businesses a common event.  The good deeds done in collecting money can come undone and hurt your bottom line.

As a successful credit management team, you will have recovered monies that may have been received shortly before the debtor company was placed into liquidation, or the individual declared bankrupt.  This can then bring a new raft of issues should the liquidator or trustee be savvy enough to want the money back. [...]  READ MORE →

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DEBT RECOVERY – HOW FAR CAN YOU GO?

Any customer or client that owes you money outside of normal trading terms is an understandable source of frustration. That frustration is compounded when the individual company involved is clearly more than capable of paying, has not raised any issues with the quality of the products or services you have supplied, and is behaving as though non-payment of debts is a normal and acceptable part of doing business.

Even though the temptation is to adopt a non-compromising, even aggressive method of debt recovery in these cases, it is wise to stop and consider the restrictions imposed on debt recovery in NSW. If you fail to do so you may unwittingly breach legislation designed to protect debtors, and get yourself in more trouble than when you started – which I am sure will only make you even more frustrated! [...]  READ MORE →

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When is it too late to collect a debt?

By Ellen Ferris, a Solicitor in Matthews Folbigg’s Insolvency, Restructuring and Debt Recovery Group.

When life gets busy, sometimes we put off important jobs to deal with more pressing matters. But when it comes to debt collection, this can only be put off for so long before debts become ‘statute barred‘. At this point the debts the subject of debt collection are no longer capable of being collected.

Most States and all Territories have time limits within which debt collection must be completed. In New South Wales, if too much time passes and the limitation period expires, section 63 of the Limitation Act 1969 (NSW) extinguishes the debt, meaning recovery of the debt is no longer possible.. [...]  READ MORE →

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Money for Nothing? Or, Something Instead of Nothing.

By Ellen Ferris, a Solicitor in Matthews Folbigg’s Insolvency, Restructuring and Debt Recovery Group.

Before commencing potentially costly court proceedings, there are a number of debt recovery options which should be canvassed by a wise creditor. One such option is that of a payment plan, or payment arrangement.

The benefits of a payment plan include;

  1. Regular payments from the debtor assisting with cashflow;
  2. Debtors are more likely to be able to repay a debt when it is broken down into smaller repayments;
  3. Potentially keeping relationships with valued customers;
  4. Opens up a channel of communication with the debtor;
  5. Avoiding disputes over the amounts owing.

A payment plan can take the form of an informal arrangement, or even just simply letting the debtor pay the debt off in smaller amounts without objecting or suing for the balance. On the other hand the terms may be set out in a formal deed.  There are advantages and disadvantages to both approaches, and much will depend upon which of the benefits set out above are most attractive to the creditor. [...]  READ MORE →

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COVID-19: Will my hearing go ahead? – Part 3

By Andrew Hack, Solicitor, and Stephen Mullette, Principal, of Matthews Folbigg Lawyers, in our Insolvency, Restructuring and Debt Recovery Group.

This is part 3 of our series on what will constitute valid grounds for an adjournment of a pending hearing, due to COVID-19 and the global coronavirus pandemic.

In Talent v Official Trustee in Bankruptcy & Anor (No 5) [2020] ACTSC 64 the Plaintiff sought an adjournment of the trial hearing, arguing that he was an ‘at risk’ person because he suffered from leukaemia. Doctors had recommended that he remain isolated. [...]  READ MORE →

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The “arid technicality” of Bankruptcy Notices?

By Andrew Hack, Solicitor, and Stephen Mullette, Principal, of Matthews Folbigg Lawyers, in our Insolvency, Restructuring and Debt Recovery Group.

At a high level the process for applying to make someone bankrupt may appear simple and straightforward. But, as the old adage goes, the devil is in the detail. At a granular level, the rules in bankruptcy proceedings are rather technical and procedures must be strictly adhered to. Often enough, a party will make a mistake where the consequence is they must start all over again, adding to lost time and increased costs. [...]  READ MORE →

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COVID-19 and Corporate Insolvency: What does an increase in corporate insolvency mean to creditors?

By Andrew Hack, Solicitor, and Stephen Mullette, Principal, of Matthews Folbigg Lawyers, in our Insolvency, Restructuring and Debt Recovery Group.

In these difficult times, recent legislative amendments provide assistance for debtors, but risk for creditors. Going forward, it will be important for creditors to carefully monitor their credit policies. Creditors are likely see more spikes in default rates over the next months while government restrictions and businesses’ staff isolation plans remain in place. Where a debtor is placed into external administration, they should be aware of their rights (and duties) during the insolvency process. [...]  READ MORE →

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WINDING UP BECAUSE ITS JUST AND EQUITABLE

By Darrin Mitchell, Senior Associate at Matthews Folbigg in the Insolvency, Restructuring and Debt Recovery Group

In a dispute between directors of a corporate entity, one resolution can be to place to company into liquidation on “just and equitable” grounds.

Section 461(1)(k) of the Corporations Act 2001 (Cth)(“the Act”) makes provision for a court to wind up a company if the court is of the opinion that it is just and equitable to do so.  Should an order be made to wind up the company, it is usual that the costs of the application be paid by the company as per section 466 of the Act and as was ordered in the matter of Re Riverside Spares Pty Ltd [2019] NSWSC 1900 [...]  READ MORE →