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The handcuffs are on debt recovery, but for how long? What you can do in the meantime…

By Jeffrey Brown, Principal at Matthews Folbigg in the Insolvency, Restructuring and Debt Recovery Group


As part of the Federal Government’s response to the COVD-19 crisis, a handbrake has effectively been applied to court proceedings aimed at bankrupting individuals and placing companies into liquidation. This has been achieved by lengthening the time for debtors to respond to formal demands, from 21 days to 6 months, for both bankruptcy notices (in the case of individuals) and statutory demands (for payment of debts incurred by companies). As part of the same reforms, the minimum debt amount that can be the subject of bankruptcy or winding up proceedings has been increased to $20,000.00.

The Federal Government intends to keep these extended compliance periods and amounts in place until at least the end of 2020. While they remain in place, debtors will be well aware that creditors have limited options open to them to enforce their debts.

Anecdotal evidence would suggest that many of those debtors are choosing to trade on their businesses well beyond the point at which they have become insolvent (that is, unable to pay their debts as they fall due).
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Debt Collection – Who Signed the Document?

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

In the current age of technology, with capabilities to do just about anything, it seems redundant and “old fashioned” to be asked to execute a document by hand writing your signature on a sheet of paper! Because of this, debt collection can be a distinct (and difficult) exercise.

When opening a credit account, a supplier of goods and/or services will generally forward a Credit Application and a Deed of Guarantee to the customer. These documents are helpful in debt collection as they include information from the customer as to the customer’s financial viability, and security for the repayment of amounts owing should debt collection become necessary. In days gone by, these documents were to be completed by the customer physically writing on the forms as required, then posting these back to the credit provider, or perhaps giving the documents to a sales representative for the supplier.
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Collecting Money? Avoid Going It Alone!

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

Collecting money, especially from people you know, is always a delicate business.

Collecting money requires you to be persistent, and all too often becomes something that we let slip to the back of our mind to avoid the hassle, inconvenience, and sometimes even embarrassment of chasing valued customers for unpaid debts. Certain debts, even large ones, can be placed in the “too hard basket”, and never followed up on. Certain timelines for recovering debts can then expire, or more simply, debts can be forgotten or ignored.

Matthews Folbigg Lawyers understand these issues. When it comes to collecting money we are very experienced, and know that handing over the problem of collecting money to lawyers is normally only considered after the last resort has failed. However, at Matthews Folbigg Lawyers we can go about collecting money in a way that suits your special relationship with your customers. Whether you would like a gentle reminder or a final warning, if you are not getting anywhere with your own attempts at collecting money, we would be happy to assist.
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