Legal Proceedings for Debt Recovery – Litigation Lawyers in Perth

February 6, 2024    litigation lawyers
Legal Proceedings for Debt Recovery – Litigation Lawyers in Perth

People usually borrow money or other assistance when they need it urgently or require funds to complete a project. Nowadays, financial houses opt for automatic debt repayment from banks. Still, if a borrower fails to pay the amount they owe in time, the litigation lawyers Perth come into the field. They work and arrange for legal proceedings to start a debt recovery process. Contrary to the common perception, debt retrieval is legally enforceable, and the borrower is bound to repay the money.

The legal definition of debt

A debt will arise when an individual’s obligation to pay or repay the money is evident, and the borrower has yet to successfully meet the obligation of paying the creditor. Some common situations where debt may arise include:

  • An individual loans money to another on condition of repayment from the lender, and the latter has yet to repay.
  • An account is submitted for goods and services, and the invoice needs to be honored within the due date.
  • Money is due and owing under an effective tenancy agreement.

However, when one party believes they are owed money, the other party’s commitment is in doubt. It is better to call the most proficient civil litigation lawyer to resolve the situation – as general debt recovery processes are not applicable here.

For instance, two parties may enter into a contract stating that one has to pay a sum upon completing some services. However, the other party queries whether the work has been appropriately completed to the required skill and care level. In these circumstances, debt recovery litigation may not work, as the legal issue here will venture more toward breach of contract or negligence.

Therefore, asking experienced debt recovery lawyers Perth before going for debt recovery proceedings is always applicable – as you wouldn’t land in a fix because of inappropriate legal action.

Letters of demand before proceedings

The Australian legal system requires the lender to issue a letter of demand to a borrower before starting legal proceedings in court. A letter of demand is a formal proclamation and claim for a debt payment, including a clear statement that legal proceedings will commence if the debt is not repaid within a certain time.

Some of the essential characteristics a letter of demand must feature:

  • It must detail the amount owed and the reason it is owed.
  • It must be addressed to the debtor and be clear of being a letter of demand.
  • It should provide a deadline for payment of the debt.
  • The demand must advise the creditor that the creditor will start proceedings in the court or tribunal unless payment is made by the due date.

The appropriate court to settle debt recovery

The creditor may start proceedings to recover the debt after the debtor ignores the letter of demand and refuses to pay what they owe. It is best to take legal help from an experienced civil litigation lawyer – as the proper court or tribunal for the proceedings will depend on:

After sending the letter of demand, if the debtor refuses to pay, the creditor might take the legal route for debt recovery.

  • The state and territory where the debt arose.
  • The amount of the debt
  • Whether a specific tribunal handles the lending type – for example, residential tenancies claim or consumer-trader claim.

The tribunals also differ according to state, and you must choose debt recovery lawyers Perth with comprehensive knowledge of the state’s laws and debt recovery regulations. Some of its examples are mentioned below:

  • The Queensland Civil and Administrative Tribunal (QCAT) can decide on debt matters amounting to less than AUD 25000 in specific lending dispute matters – such as money borrowed and not repaid, IOUs, and unpaid invoices. The tribunal can send debt matters relating to sums less than 1500 AUD to a hearing without mediation and lend matters involving more than 1500 AUD to a hearing after mediation attempts.
  • The Victorian Civil and Administrative Tribunal (VCAT) has the legal power to hear disputes about non-payment for provided goods and services. General debt recovery matters (like that of QCAT) are out of its jurisdiction.

Your chosen debt recovery lawyers Perth must know the jurisdictional limit of each court and tribunals of different states and territories to ensure a smooth proceeding and quick verdict. For example, in Western Australia, the Supreme Court can hear civil disputes averaging over 750,000 AUD. In contrast, the District or the Supreme Court will hear civil disputes of 100,000 AUD or more in South Australia.

Conclusion

People may opt for negotiation to avoid the long legal proceedings. Still, hiring the most proficient litigation lawyers Perth will be helpful in cases where the debtor cannot be located or a violence threat has been issued on the repayment demand. Therefore, it is always best to consult experienced legal help before starting debt recovery procedures.

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