By Bonnie McMahon an Associate of Matthews Folbigg, in our Insolvency, Restructuring and Debt Recovery Group
When collecting money from a debtor in NSW, it is important to ensure that you are collecting money in the right court.
- Collecting money under $20,000 – When collecting money which is under $20,000, debt collection proceedings should be commenced in the Small Claims Division of the Local Court of NSW.
- Collecting money over $20,000 but under $100,000 – When collecting money which is over $20,000 but under $100,000, debt collection proceedings should be commenced in the General Division of the Local Court of NSW. However, there are some circumstances where collecting money up to $120,000 can be done in the Local Court, although you will normally need the consent of the debtor.
- Collecting money over $100,000 but under $750,000 – When collecting money which is over $100,000 but under $750,000, debt collection proceedings should be commenced in the District Court of NSW. However, like the Local Court, the District Court can hear debt collection matters up to $1,125,000, provided no party objects to the matter being heard in the District Court.
- Collecting money over $750,000 – When collecting money over $750,000, debt recovery proceedings should generally be commenced in the Supreme Court of NSW.
What happens if you are collecting money by debt collection proceedings in the wrong court?
If you are collecting money in the Supreme Court and you obtain a judgment for less than $500,000, you may not be able to recover costs from the debtor, unless the Supreme Court is satisfied that commencing debt collection proceedings in the Supreme Court was warranted.
Similarly, if you are collecting money in the District Court and obtain a judgment for less than $40,000, you may not be able to recover costs from the debtor, unless the District Court is satisfied that commencing debt collection proceedings in the District Court was warranted.
If you need assistance with collecting money from a debtor or determining which court is right for your claim, Matthews Folbigg Lawyers can provide you with specialist debt collection advice regarding the best way for collecting money owed to you.
If you would like more information or advice in relation to collecting money, or insolvency, restructuring or debt recovery law, contact Bonnie McMahon at bonniem@matthewsfolbigg.com.au or a Principal of the Matthews Folbigg Insolvency, Restructuring & Debt Recovery Group:
Jeffrey Brown on (02) 9806 7446 or jeffreyb@matthewsfolbigg.com.au
Stephen Mullette on (02) 9806 7459 or stephenm@matthewsfolbigg.com.au
