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Unpaid School Fees – How To Avoid And Handle Debt Collection In Relation To Tuition

When school fees go unpaid, it puts education providers in a tough position. On the one hand, there is a student relying on their institution for fundamental learning. On the other, without debt collection the financial viability of running the school is put at risk. It is therefore important to implement a plan so that debt collection procedures are avoided, or where absolutely necessary, are as painless as possible. This involves contemplating debt collection before students enrol, when tuition is overdue, and when debt collection proceedings become inevitable. [...]  READ MORE →

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When Will a Court Replace a Trustee of a Bankrupt Estate?

Recently, the Federal Court of Australia (Justice Perry) in Yan v Spyrakis (Trustee), in the matter of the bankrupt estate of Liu [2024] FCA 768 considered when a Court may make an order to replace a trustee of a bankrupt estate under section 90-15 of Schedule 2 to the Bankruptcy Act 1966 (Cth) (“the Schedule”).

Facts

In December 2017, Mr Yan loaned $10 million to Mr Liu and GR Capital. In November 2021, Mr Liu became bankrupt, and Mr Spyrakis (“the Trustee”) was appointed as his trustee in bankruptcy. In March 2022, the Trustee published a report to the creditors of the bankrupt estate of Mr Liu (“the Estate”) stating approximately $64 million was owed to creditors and that Mr Yan, Ruifa Wang, and Yuqing Liu and Xingfeng Australia International Investment Pty Ltd (“Xingfeng”), were the unsecured creditors owed the largest debts. [...]  READ MORE →

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When will courts pull the plug? Understanding the termination of a Deed of Company Arrangement under section 445D(1)(g) of the Corporations Act 2001 (Cth)

When will a Court terminate a Deed of Company Arrangement (DOCA) for ‘some other reason’ under section 445D(1)(g) of the Corporations Act 2001 (Cth) (”the Act”)? In two recent cases, two separate courts have shed light on whether, and when, ‘public interest’ serves as a compelling reason to terminate a DOCA.

Yan v The Won Capital Pty Ltd [2024] NSWSC 758

Facts

In December 2017, Mr Yan loaned $10 million to GR Capital. In October 2018, GR Capital appointed administrators who reported to creditors the preliminary view that GR Capital had been insolvent since at least December 2017. Despite the administrators’ recommendations against the DOCA, creditors resolved on 30 January 2019 that GR Capital execute a holding DOCA allowing time to complete a property development before creditors could take action against GR Capital. Mr Yan commenced proceedings seeking termination of the DOCA under section 445D(1) of the Act to allow a liquidator to investigate insolvent trading claims. Mr Yan offered to provide funding to the liquidator for the investigations. As the limitation period on any insolvent trading claim was about to expire, it became urgent whether the DOCA was to be terminated and a liquidator appointed. [...]  READ MORE →

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DEBT COLLECTOR OR DEBT COLLECTION LAWYER? WHICH IS BEST FOR DEBT COLLECTION?

Debt collection is difficult at the best of times. To make debt collection easier, it is natural to turn to debt collectors or debt collection lawyers to assist. But who is best placed to deal with your specific situation? To answer this, it is worth thinking about the nature of the relationship you have with the debtor.

The debt collection relationship between debtor and creditor:

Debt collection can arise in all manner of situations. It can happen when a trusted and valuable commercial associate falls on hard times, when an opportunistic borrower thinks they can get away with not paying their bills, or for countless other reasons. The nature of the debtor/creditor relationship can be integral to the approach. [...]  READ MORE →

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Collecting Money: which court should I pick?

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. [...]  READ MORE →

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Debt Recovery for Small to Medium Businesses

Debt recovery – All small/medium business owners have been here before – you have taken the time and care to provide your quality goods or services to a customer, and when it comes time for them to pay, you get radio silence or a refusal to pay. Your phone calls, texts and emails with payment reminders and attempts to follow up have been unsuccessful, and now, weeks or months later, you are exhausted and still have a large unpaid invoice, plus all the time and money you have spent on debt collection services. [...]  READ MORE →

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Security for Costs Order

Security for Costs: How to not get dragged down by the impecunious Plaintiff

A successful defendant can often be left with a significant legal bill despite a court ordering the plaintiff to pay their costs of the proceeding – winning the battle but losing the war.

Imagine you find yourself as a defendant in proceedings that you never saw coming and  which should ultimately never have happened. The plaintiff’s claims may lack merit and have very low prospects of success, but they commenced proceedings against you anyway in a desperate attempt to recover money that they lost as a consequence of their own actions. After all of the hours of stress, sleepless nights, phone calls, meetings, and thousands of dollars of legal fees, you and your legal team emerge from litigation victorious, with the plaintiff to pay your costs of the proceeding – only to find out, the plaintiff has no money, no assets and is unable to pay your legal fees. [...]  READ MORE →

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AICM Risk Report 2023

Australian Institute of Credit Management – Risk Report 2023

Credit professionals play a crucial role in any business, ensuring that both the risks of
defaulting on contractual obligations are managed, and that payment of goods or services
are received in a timely manner.

The Australian Institute of Credit Management (AICM) is a member body for commercial and
consumer management professionals formed with the goal of helping their members,
partners, government, other related bodies and the business community to succeed in
credit-related matters.

The AICM has released their Risk Report 2023 (Report) which provides a succinct and
useful insight on how recent and future economic conditions are impacting credit
professional’s abilities to manage risk and ensure a business is paid promptly for their
services. The Report draws on survey results collected from AICM members and Certified
Credit Executives. [...]  READ MORE →

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Dotting the I’s, and crossing the T’s – the perils of creditors statutory demands

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

The slightest slip of the pen can lead to disastrous consequences when you are dealing with creditors statutory demands, as a recent Supreme Court case demonstrates.

VO Group Australia Pty Limited (“VO”) was making an application to set aside a statutory demand that had been issued on it by Watpac Construction Pty Limited (“Watpac”).  Watpac in turn alleged that the application was made outside the 21 day time limit for making such an application and was invalid. [...]  READ MORE →

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Challenging Demands

By Jacob Reardon a Solicitor of Matthews Folbigg, in our Insolvency, Restructuring and Debt Recovery Group.

Section 459G(1) of the Corporations Act 2001 (Cth) (“the Act”) allows a debtor company served with a statutory demand to apply to the Court to have it set aside. Under s 459G(2) any such application must be filed within the 21 day statutory limitation period. This is a strict 21 days and generally cannot be extended.

The operation of s 459G and the strict 21 days limit has led to some controversy in situations where a debtor company has been served with a statutory demand, but does not become aware of the service until after the expiry of the 21 day period. How could it file an application to set aside a demand it did not know about? [...]  READ MORE →

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WHY JUST DO DEBT COLLECTION WHEN YOU CAN HAVE A DEBT COLLECTION LAWYER!

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

With the current economic crisis and the increase in the cost of living, debt collection is also on the rise. We have found that creditors are pursuing debt collection, no matter the quantum of that debt. Creditors are becoming less patient and less lenient with informal debt collection and want to see more formal, efficient and effective debt collection methods, sooner.

Debt collection by commencing proceedings tends to be the last resort in the debt collection process. However, in current times plenty of creditors have decided to skip the first few steps, and jump straight to formal debt collection. There are numerous creditors who are simply taking a much “harder” approach with debt collection and commencing proceedings from the “get go.” This can be an efficient and effective approach to debt collection, but it would be sensible not to apply a “one size fits all” approach to debt collection. Many of a creditor’s debt collection decisions should be made on a case-by-case basis, taking into account the debt collection sum, debt collection fees already incurred, and any known factors regarding the debt or the debtor which will make a particular debt collection method most effective. [...]  READ MORE →

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The Economic Storm – and How To Weather It

The Australian Tax Office (ATO) have reinvigorated their efforts in debt collection after a period of reduced collection over the pandemic. The ATOs post-pandemic debt collection campaign is characterised by recent surges in Director Penalty Notices (DPNs), an upswing in winding up filings, statutory demands and insolvency appointments. This, coupled with the challenging nature of the current Australian economy has hit businesses hard, especially in NSW, with insolvency appointments up 62 percent in the first half of 2022-23. [...]  READ MORE →