Debt Recovery in NSW Explained: Letters of Demand to Litigation (Series: Debt Recovery)
Overview of the Debt Recovery Process and your options
As part of our series on debt recovery, we now delve into the intricacies of the debt recovery process - from issuing demand letters to potentially resorting to litigation. With Titance Legal at your side, we ensure you're equipped and prepared to tackle each step efficiently.
Establishing Informal Negotiations
The debt recovery process typically commences with informal negotiations. At Titance Legal, we'll act as your advocate during these discussions, leveraging our knowledge and experience to navigate your specific circumstances.
Writing a Letter of Demand
If initial discussions aren't successful, a Letter of Demand becomes essential. This document explicitly requests the debtor to pay the outstanding sum within a stipulated period, mentioning potential legal repercussions in the event of non-payment. We're here to assist you in crafting a compelling Letter of Demand that fits your situation.
Mediation and Adjudication
Should disputes remain unresolved, mediation may be required. In NSW, Community Justice Centres (CJCs) offer free mediation services, while the Building and Construction Industry Security of Payment Act 1999 provides low-cost adjudication services for construction-related disputes.
Commencing Legal Proceedings
When previous steps don't yield results, legal action could be the next move. This involves lodging a Statement of Claim with the relevant court, depending on the debt size.
Enforcing Judgements
When court orders are not honoured, the creditor must enforce the judgement, as specified in the Civil Procedure Act 2005. The creditor has 12 years from the judgement date to enforce this order. Our team at Titance Legal can guide you through the enforcement process.
Alternative Methods and Creditor's Statutory Demand
The Consumer, Trader and Tenancy Tribunal offers an alternative to court proceedings for dispute resolution. However, for larger businesses, other options might be more suitable.
One such alternative method for corporate debtors owing more than $4,000 is a Creditor’s Statutory Demand under the Corporations Act 2001. If the company fails to pay within 21 days, it could face insolvency proceedings.
Another strategy includes outsourcing debt collection to licensed third-party agents or selling outstanding debts as part of a cash management strategy.
Securing Success with Titance Legal
At Titance Legal, we offer in-depth expertise, tailored strategies, transparency, and trust, complete support, and up-to-date legal compliance. Our commitment is to help your business navigate the debt recovery process efficiently.
Take the Next Step with Titance Legal
Knowledge of the debt recovery process is crucial in effectively managing outstanding debts. From the initial Letter of Demand to potential litigation, Titance Legal is here to support you. Reach out to us today and let's start your journey towards a financially secure business future.
Stay tuned for our upcoming article where we’ll share how to craft an effective Letter of Demand. At Titance Legal, your success is our goal.
