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Paper, who needs paper?

By Renee Smith a Solicitor of Matthews Folbigg, in our Insolvency, Restructuring and Debt Recovery Group.

In today’s society of evolving technology, contracts between parties can be whipped up in no time. However, what happens when an agreement between two parties is not formalised in writing and a debt is claimed by one party to another. Can the creditor still enforce the payment of the debt? If so, on what terms?

In the recent decision of Saravinovski v Duncombe [2017] NSWSC 1521, the Supreme Court was asked to overturn the decision of a local court magistrate who granted Mr Duncombe, a private investigator, judgment in respect of a debt for unpaid surveillance fees owed to him by Mr Saravinovski. While there was no formal contract signed, the parties had had many discussions regarding particular aspects of the services Mr Duncombe was to provide and which he subsequently delivered. [...]  READ MORE →

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Double Whammy! When cost orders become a further debt

By Hayley Hitch a Solicitor of Matthews Folbigg Lawyers in our Insolvency, Restructuring and Debt Recovery Group

In one of our recent matters, proceedings were commenced against a debtor, and the relevant guarantor, in the Local Court of NSW for recovery of a debt, being non-payment of services rendered by our client to the debtor.

Local Court proceedings

The defendants were at all times self-represented in those proceedings and took steps to file defences, out of time (and without leave) and also failed to appear in Court on several occasions. This ultimately led to: [...]  READ MORE →

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Can you serve legal documents by Facebook?

By Andrew Behman, an Associate of Matthews Folbigg, in our Insolvency, Restructuring and Debt Recovery Group

Yes, it is possible to serve documents via Facebook. In an earlier blog “Serving debtors that don’t want to be found“, we discussed how legal documents can be served by substituted service. Service via Facebook, LinkedIn and Instagram are some of the many methods legal documents can be served by substituted service.

In possibly a world first in 2008, the ACT Supreme Court granted orders for substituted service for the police to serve legal documents via a private message on Facebook. Since then, there have been many occasions in which the courts have allowed legal documents to be served via Facebook. You might even remember that in 2012, the District Court of NSW allowed for legal documents to be served on the rapper Flo Rida via his official Facebook page. Those orders for service via Facebook were ultimately overturned on appeal because, among other reasons, the evidence did not show that Facebook page through which the documents were served was actually the Facebook page of Flo Rida. [...]  READ MORE →

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Serving debtors who don’t want to be found

By Andrew Behman, an Associate of Matthews Folbigg, in our Insolvency, Restructuring and Debt Recovery Group

In an earlier blog “When is an old debt too old to collect“, we discussed how some of the more difficult to collect debts are often placed in the ‘too hard basket’. An all too common reason that these debts are in the ‘too hard basket’ is because you can’t find the debtor. They’ve moved address and you can’t find them to be able to serve them with legal documents. However, this is not the end! [...]  READ MORE →

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I only have the business name of the debtor, can I still sue them?

By Renee Smith a Solicitor of Matthews Folbigg, in our Insolvency, Restructuring and Debt Recovery Group.

When looking to commence proceedings against a debtor, one of the first steps to take is to identify exactly who (or what) it is that you have contracted with. Usually this will be the party that is listed as your customer in the written contract.  This may be an individual, company or trustee of some form of trust. Sometimes of course, the relevant paperwork is either missing, or was never created in the first place. [...]  READ MORE →

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Debt Recovery from a Company that has ‘Ceased to Be’…

By Renee Smith a Solicitor of Matthews Folbigg, in our Insolvency, Restructuring and Debt Recovery Group.

What sort of debt recovery procedure exists for companies that have been deregistered? From time to time Matthews Folbigg are asked to advise clients in relation to debt recovery and enforcement of debts against debtor companies who have been deregistered.

So what can be done for debt recovery against a deregistered company?

Under section 601AD the Corporations Act 2001 (Cth) (“the Act”), once a company is deregistered it ceases to exist as a legal entity. As Monty Python would put it, the company, far from pining for the Norwegian fjords, ‘is no more’, and ‘has ceased to be’. As a result, all of the company’s property vests in ASIC (or in the Commonwealth if held on trust – a not uncommon situation for trading trusts) and any legal proceedings cannot be commenced or continued. [...]  READ MORE →

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Proposed Changes to Credit Reporting Before Senate: Will it impact debt recovery?

By Bonnie McMahon an Associate of Matthews Folbigg, in our Insolvency, Restructuring and Debt Recovery Group

The Commonwealth government has introduced the National Consumer Credit Protection Amendment (Mandatory Comprehensive Credit Reporting) Bill 2018 (“the Bill“), which is currently before the Senate.

If passed, the Bill will require the four major banks (Westpac, Commonwealth Bank of Australia, National Australia Bank and Australia and New Zealand Banking Group) to supply their comprehensive credit information to credit reporting agencies, which will include information regarding customers that have been involved in a debt recovery process. The banks will also be required to keep the information they supply, accurate, complete and up to date, on all existing and new accounts. [...]  READ MORE →

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How to serve a statutory demand

By Andrew Behman, an Associate of Matthews Folbigg, in our Insolvency, Restructuring and Debt Recovery Group

In earlier articles, we highlighted the problems that arise when serving a Creditor’s Statutory Demand by post: see You’ve been served! and It Serves You Right?.

This issue reared its head again two weeks ago in winding up proceedings in the Supreme Court of NSW in which we acted for the creditor. The Court was satisfied with all but one element of the evidence required to make the winding up order. The Court did not accept that the statutory demand had been properly posted (even though there was evidence of postage). [...]  READ MORE →

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When is an old debt too old to collect?

By Andrew Behman, an Associate of Matthews Folbigg, in our Insolvency, Restructuring and Debt Recovery Group

Sometimes, we are all a bit guilty of putting some of the more difficult to collect debts in the ‘too hard basket’ for too long. For so long that they become an ‘old debt’. But how long can you leave an old debt before it’s too late to collect? And the old debt becomes ‘statute barred’?

For debts in NSW, the clock generally starts running for a period of 6 years from the date the cause of action first accrues (e.g. the date of default). After the expiry of this 6 year period, the legislation restricts you from recovering the debt and it becomes ‘stature barred’. [...]  READ MORE →

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Collecting debts is a legislative minefield

As if running your business isn’t complex enough – the process of chasing and collecting debts can be like wandering through a maze, and that’s even before you make contact with the debtor!

Debt collection is a heavily regulated activity in Australia. State and Federal legislation sets restraints on collection activities and are easy to fall foul of if you are not across the detail. Here is a (non-exhaustive) list of some of the legislation that affects how you can go about chasing debts: [...]  READ MORE →

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When its better to get something than nothing, the use of Payment Arrangements in recovering your debt.

By Renee Smith a Solicitor of Matthews Folbigg, in our Insolvency, Restructuring and Debt Recovery Group

When looking to recover funds from a Debtor there are numerous ways in which it can be recovered. All of those options should be canvassed and considered carefully. One of those options is an agreed payment arrangement.

Benefits of entering into a payment arrangement include the ability to receive regular periodic payments of funds from the Debtor as well as the ability to monitor the Debtor for any changes in their financial situation. In setting a frequent payment schedule such as weekly or fortnightly, any sudden changes in the Debtor’s financial situation such as the Debtor going into Bankruptcy or the Debtor Company going into external administration can be found out and acted upon quickly. An obvious disadvantage of entering into a payment arrangement is that depending on the amount of the debt owing, it can take some time for the outstanding debt to be paid in full. [...]  READ MORE →

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Credit Repair Schemes – A Magic Wand?

The Australian Securities & Investments Commission (ASIC) has just issued a press release warning consumers about the aggressive and misleading sales techniques of companies promising to wipe clean bad credit reports.

As the press release makes clear, many of these companies are making promises they cannot keep and at the same time are seeking large upfront payments. See a copy of the press release here.

Despite what you might hear in certain advertisements, there is no “magic wand” for a debtor to improve their credit rating. The only ways that a credit report can be amended or updated is if the default listing is incorrect or the debt is paid. [...]  READ MORE →