Recovering and repaying debt can be stressful, especially when repayments become urgent. If you’re struggling to recover or repay debts, talk to our experienced debt recovery lawyer in Melbourne.
If traditional debt collection methods fail, pursuing legal action may be the necessary next step. When the debt exceeds $5,000.00 and the debtor or company possesses assets to satisfy the debt, legal action should be considered. While there are additional factors to consider, these two criteria are crucial. At Pentana Stanton Lawyers, we refer such cases to our expert insolvency and bankruptcy team of debt recovery lawyers in Melbourne to ensure that the necessary requirements for legal action have been met.
The question often arises: What is the legal process and how does it all begin? Small claims actions are lawsuits filed in court against individuals, partnerships, businesses, or corporations to recover small amounts of money owed. These procedures can be effective for recovering debts owed to you or your business.
Our debt recovery lawyers shed light on the process of small claims debt recovery in Victoria.
For successful small claims debt recovery, the debt must be legally enforceable, and it should not be affected by the National Credit Code or the National Consumer Protection Act of 2009. These laws do not apply to the debts in question.
Initiating a small claims case typically begins with a demand letter. This letter serves as the initial step before filing any paperwork with the court. While making a clear demand for the owed money, it is essential to avoid harassing the debtor. Transparency and honesty should be maintained throughout the letter, ensuring that it does not give the impression of being sent directly from the court.
At Pentana Stanton Lawyers, our first objective is to collect the debt without resorting to legal action. When the debtor responds to your letter, it is advisable to try to negotiate a payment agreement before pursuing further legal measures. Congratulations if the debtor pays the owed amount, as small claims recovery is no longer required. In cases where immediate payment is not made, you may consider working out a viable payment plan with the debtor. However, if no satisfactory resolution can be reached, it might be necessary to write off the debt. Notably, paying off the debt can provide you with a tax break, making it an appealing option for smaller bills.
If a resolution cannot be reached through negotiation, filing a claim in the local small claims court becomes the next step to legally recover the owed money. In Melbourne Victoria, these claims can be filed in either the local Magistrates’ Court or the Victorian Civil and Administrative Tribunal (VCAT).
The Magistrates’ Court is suitable for hearing claims worth less than $100,000 that are within six years of the debt’s occurrence. It is an ideal choice for those seeking to recover modest debts outside of the Melbourne metropolitan region or those who do not fall under VCAT categories.
VCAT, on the other hand, handles claims that fall under the Australian Consumer Law and Fair Trading Act of 2012 (ACLFTA). This primarily applies to debts related to goods or services. Filing under ACLFTA provides several potential remedies, but there are limitations, such as filing costs and no viable remedy for disputes prior to September 1, 1999.
When pursuing legal action by debt collection lawyers in Melbourne, there is a high probability of recovering the owed money, whether through demand letters or by filing claims in the Magistrates’ Court or VCAT. If the magistrate or VCAT tribunal member orders the debtor to pay, their decision becomes legally binding. In some cases, the debtor may also be required to pay interest and a portion of your legal fees.
We assess your claim and the level of supporting documentation.
We send a formal letter of demand to the debtor.
If the debtor is unable to pay, negotiating a long-term payment plan might be necessary.
If the debtor refuses to respond or pay the debt, we’ll enforce your debt by taking them to court.
”Jashan was understanding and went above and beyond to help me. Thank you very much Jashan, much appreciated.
Kim Kilian
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Pentana Stanton Lawyers expert team of debt recovery lawyers based in Melbourne ensures that the necessary requirements for legal action are met. Navigating debt recovery can be a stressful process, but it is reassuring to know that Victoria has established procedures to assist creditors in reclaiming what is owed to them. By understanding the available legal options and partnering with experienced debt recovery lawyers like Pentana Stanton, you can pursue your debts while ensuring a smooth legal process and the best possible outcome
Pre-packing through voluntary administration can be a way to legally resurrect your company.
For businesses with under $1 million in liabilities, a restructuring plan can provide a path forward.
Voluntary administration involves handing control of your company over to an administrator.
A receiver’s duty is to repay a specific secured creditor and report infringements to ASIC, which may involve selling assets or even the business.
A liquidator has a duty to repay all creditors by winding the company up.
Negotiating with your creditors is the best way to navigate personal insolvency. Talk to an insolvency lawyer about how they can help.
Get protection for 21 days from unsecured creditors as you seek advice from a lawyer or financial adviser.
Make a binding agreement with creditors to pay off your debts over time.
You agree to appoint a trustee to take control of your estate to pay your debts.
An AFSA trustee manages your bankruptcy – after three years and one day of bankruptcy, you will be released from most debts.
Jesse is a highly experienced commercial solicitor admitted at both the Supreme Court of Victoria and the High Court of Australia.
He excels at partnering with growing organisations to help drive sustainable growth.
When you’re preparing for your consultation with one of our team, reading up on the basics of debt recovery and insolvency can be helpful.
Get started with our library of easy-to-read articles and guides.
A bad debt is money that can’t be recovered from a borrower. You can claim a deduction for bad debt in your tax return.
Illegal phoenix activity is the act of transferring Company A’s assets to Company B at a cost below market value, liquidating Company A to wipe Company A’s debts, then continuing Company A’s business as Company B, using the same business structure, assets and staff.
In other words, illegal phoenix activity uses the debt protections afforded by a company structure to defeat creditors, with the company’s directors then continuing the business via a different entity. Illegal phoenix activity is taken very seriously by ASIC, and directors and advisers who participate in it can face serious penalties.
There are some situations in which you may be unable to collect a debt.
The best way to make sure your debtors pay what they owe is to regularly contact them about payments and keep clear, consistent records that prove who owes what. If you’re struggling to collect a debt or the debtor is threatening to complain to regulators, talk to our team.
In Victoria, bankruptcy lasts for three years and one day, starting from either:
Your trustee can, in some situations, apply to extend your bankruptcy period to eight years.
While declaring bankruptcy can help you discharge certain types of debt, there are some debts that survive bankruptcy. These include debts incurred by fraud, child support debts, and debts to secured creditors (subject to conditions under s 153 of the Bankruptcy Act 1966 (Cth)).
It’s also important to be aware that, by declaring bankruptcy, you aren’t freeing other responsible parties from their obligations to your creditors. For example, anyone who was in a partnership or was a co-trustee with you at the time of bankruptcy – or anyone who acted as surety for you – is still liable even if your debts are extinguished through bankruptcy.
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