Debt Recovery in South Australia
When you are owed money by a person or business, it is often hard to decide how to approach the matter. Some people are uncomfortable with pursuing debts, and as a result significant debts go unpaid. Sometimes, debt recovery proceedings aren’t actually the best way of recovering your money, and issuing proceedings for negligence or breach of contract are a better option. While Websters Lawyers employ a team of experienced debt recovery specialists to provide you all the assistance you need, below is a brief summary of a standard debt collection procedure.
STEP ONE: MAKE YOUR INTENTIONS CLEAR
So you may have sent some emails, perhaps even left a few telephone messages. But have you made your intention to recover the debt clear? In South Australia, before you can start any litigation, you are required to send a formal Notice of Claim or Letter of Demand. This correspondence tells the debtor (the person owing money) the details of your claim and gives the debtor 21 days to settle your claim, otherwise you will commence legal action. It is important this document is sent; otherwise you might not be able to recover your legal costs should you have to go to court.
STEP TWO: FILING IN COURT
The 21 days have passed, and you’ve received no contact, or perhaps you’ve even been told that no money is owing. What now? To enforce your claim, you will need to file documents in court. Depending on the size of the debt owed, you will either file a Claim in the Magistrate Court or District Court. Any claims under $12,000.00 are filed in the Magistrates Court Minor Civil Division, between $12,000.00 and $100,000.00 are filed in the Magistrates Court Civil Division, and anything over $100,000.00 goes straight to the District Court.
If the debtor does not file a response to your claim, you may seek default judgement, which means the court will automatically find in your favour.
STEP THREE: GOING TO COURT
Once you have been given a court date, both you and the debtor will be required to attend court. If you’re heading to the Magistrates Court Minor Civil Division, you won’t have a lawyer- no lawyers are allowed without the consent of both parties and the court. The Minor Civil Division is a much less formal setting. The Magistrate often acts as a mediator, trying to see if the matter can be resolved without the need for further litigation.
Matters heard in the Magistrates Court Civil Division and District Court have all the full court formalities attached. It is a very good idea to have a lawyer present to speak on your behalf. Both parties will be required to make a Litigation Plan, which is a guide as to how the matter will proceed. At all levels, if the matter can’t be resolved then it is set down for a trial.
Whatever the outcome, Trial is a lengthy and expensive process which can potentially reduce the value of the debt you are trying to recover. Websters Lawyers can help prevent your matter getting this far through early intervention and expert negotiations.
STEP FOUR: GETTING THE MONEY
After you’ve reached an agreement or been successful in court, how do you enforce that? In South Australia, there are a few ways to ensure that you get your money.
If the debt is less than $10,000.00, a court may order an investigation hearing so it can determine what payments the debtor can afford to make. If two or more payments are missed, the debtor has to return to court to explain why they haven’t paid.
A Warrant of Sale can be requested for any debts over $10,000.00. This means that a court bailiff can seize some of the debtor’s property so it can be sold to pay the debt. However, a bailiff will not seize minor personal items or items with a value of less than $2,500.00.
A Charging Order is a document that is registered with the South Australian Lands Titles Office. This prevents the property being dealt with, such as being sold or transferred to someone else, until the debt has been paid.
A Garnishing Order can be issued where the debtor is expecting money from someone else, such as their employer in the form of wages. Part of the money coming to the debtor is taken, or “garnished”, and used to pay the debt.
The right avenue to recovering a debt can not always be clear. At Websters Lawyers, we can take the guess work out of debt recovery and work to ensure that you can maximise the recovery while minimising the stress. Contact us today for a free initial consultation.