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COLLECTING MONEY!

By Anica Cunanan, Solicitor at Matthews Folbigg in the Insolvency, Restructuring and Debt Recovery Group

Finding trouble collecting money? Matthews Folbigg Lawyers understand how challenging and delicate collecting money can be – especially, when you are collecting money from someone you know or alternatively, collecting money from someone to whom you are still providing goods and/or services.

At Matthews Folbigg Lawyers, we have demonstrated experience with collecting money from debtors who have had a business relationship breakdown with a creditor or alternatively, collecting money from debtors who continue to have business relationships with their creditors. Collecting money, no matter the dynamic between the creditor and debtor, can be a very delicate situation. [...]  READ MORE →

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Identifying the Debtor!

By Hayley Hitch, a Senior Associate of Matthews Folbigg, in our Insolvency, Restructuring and Debt Recovery Group.

Sometimes it can be difficult to identify who is your actual debtor…is it the company name placed on the application, is it linked to the ABN number on the application, or is it the individual who signed the application…?

One of the biggest mistakes creditors make when attempting to recover a debt is going after the wrong debtor. Although a credit application has been completed in its entirety it may not contain the necessary information to recover a debt from a customer. [...]  READ MORE →

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Does the PPSR matter anymore?

By Jeffrey Brown, a Principal of Matthews Folbigg, in our Insolvency, Restructuring and Debt Recovery Group.

It has now been over 10 years since the Personal Property Securities Register (PPSR) opened in Australia for the first time. When the PPSR went live in January 2012 Australia had for the first time a public ‘noticeboard’ of security interests in personal property, centralised on one database.

The number of new registrations on the PPSR reached a monthly peak in January 2014 when 281,010 new registrations were lodged. Since that time the number of registrations has seen a steady monthly decline, with the latest monthly figures showing 253 new registrations in March 2022 (ppsr.gov.au/about-us/news-engagement/ppsr-statistics). Is this a sign that the PPSR is being ignored by the companies and individuals that were supposed to be its key stakeholders? [...]  READ MORE →

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Statutory Demands for Debt Recovery: Risky Business?

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

Whilst a statutory demand may seem like a good debt recovery strategy, it is important for creditors to remember that there can be harsh consequences if they issue a statutory demand, which is later set aside by a court.

The recent Supreme Court decision of Rees J in In the matter of HWC Contracting Pty Ltd [2021] NSWSC 1684 (“HWC Contracting”), is a important reminder for creditors engaging in debt recovery that if a debtor successfully sets aside a statutory demand, it is likely the creditor will be ordered to pay the debtor’s legal costs. A fast simple debt recovery technique can end up become very expensive, and costs may even outweigh the debt recovery amount. [...]  READ MORE →

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Collecting Money: Which court should I pick?

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. [...]  READ MORE →

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KNOWING YOUR LIMITATIONS

By Anica Cunanan, Solicitor at Matthews Folbigg in the Insolvency, Restructuring and Debt Recovery Group

Has the COVID-19 pandemic affected your approach to debt collection? Have you deferred debt collection, or accepted payment arrangements on matters which you would have previously sent for debt collection? The last few years have certainly tested the limits of creditors’ willingness to defer debt collection. However with debt collection generosity comes the very real risk that some amounts may no longer be available for debt collection. When considering leniency with your debt collection, it is important to know your limitations. [...]  READ MORE →

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Overdue payment – lawyer or Debt Collector?

By Jodie Rodrigues, solicitor at Matthews Folbigg in the Insolvency, Restructuring and Debt Recovery Group

So you’ve found an outstanding invoice. Sure, all invoices are valuable to a business but now you’re considering whether there is any commercial benefit to asking a lawyer to chase the debt. There are real advantages in using a lawyer rather than a debt collector to assist with collection of your debts. There are three main questions you should ask when considering which invoices to chase through legal proceedings: [...]  READ MORE →

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The Schools Blog: Part 3 – The Fail Safe for Fee Recovery

There is an inherent difficulty in balancing the financial viability of a school with the desire to educate will often come to a head because educating the child is no longer possible. In such cases, it may be necessary to recover school fees through legal proceedings. This instalment of the blog series provides a short summary of the standard recovery process.

  1. Settlement – Negotiations over the terms of a settlement will often continue for the duration of the legal proceedings. Settlement does not mean complete compromise; it may simply mean that the parties have recognised that the cost of legal fees will mean that payment of the unpaid fees is more efficiently and economically resolved between the parties. Legal proceedings can sometimes be necessary to draw parents and guardians to that conclusion.
  2. Legal Letters – A letter of demand provides the parents and guardians with a final opportunity to make payment before Court proceedings are commenced. If drafted on the letterhead of a law firm, this letter will often elicit a response from the parents and guardians. This response may include information about their position as relevant to the commencement and resolution of legal proceedings and, in the best case, provide for the payment of the unpaid fees.
  3. Court Proceedings – Court proceedings are commenced by filing a Statement of Claim in which the school can claim the unpaid fees, interest and some of their legal costs. There are generally two avenues once the Statement of Claim is filed:
    1. Undefended proceedings – an inadequate (or no) response from the parents and guardians which leads to Default Judgment being awarded in favour of the school; or
    2. Defended proceedings – the debt recovery matter proceeds as a case before the Local Court.
    Enforcement – Once judgment has been made in favour of the school, there are several options available to obtain payment from parents or guardians including garnishing wages or existing bank balances, Court ordered payment plans and orders for the sale of personal property. The suitability of these options varies in view of the amount to be recovered and the school’s desire to maintain a relationship with student and their parents and guardians.

    In the interest of costs and maintaining relationships, the school should exhaust all informal recovery options prior to commencing legal proceedings. However, if your school is considering recovering its fees through legal proceedings, we invite you to contact the Matthews Folbigg on 9635 7966 and talk to our friendly Debt Recovery team about your options. [...]  READ MORE →

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A DEBT COLLECTION AGENCY VERSUS A DEBT COLLECTION LAWYER

By Anica Cunanan, Solicitor at Matthews Folbigg in the Insolvency, Restructuring and Debt Recovery Group

The debt collection process is one which causes a lot of hesitation and frustration which can lead to a misunderstanding of what the key differences are between a debt collection agency and a debt collection lawyer.

Some creditors choose to handle such matters on their own whilst others choose to engage with a debt collection agency at first instance. That being said, engaging with a debt collection lawyer is a step which many avoid due to some misconceptions of how lawyers deal with the debt recovery process and by the same token, engaging a lawyer can seem daunting. [...]  READ MORE →

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The Schools Blog: Part 2 – Recovering fees whilst retaining relationships

Unpaid school fees can cause a strain in the relationship between the school and parents and guardians. The school is often left in a difficult position where the desire to educate children competes with the financial viability of running the school. There are however, a few simple steps that can be taken to resolve conflicts about unpaid school fees between the school and parents and guardians.

  1. Telephone Discussions – Informal discussions are an undervalued tool in resolving fee disputes. Whilst it may be more convenient in the short term to send statements to parents and guardians, a quick conversation with the parents and guardians can help to identify the underlying issues which are preventing payment. Smaller issues can be addressed quickly and efficiently so that the school fees are paid without the need to escalate the non-payment. Larger issues can be referred to a solicitor for consideration of the most efficient and cost effective forward in rectifying the non-payment.
  2. Payment Plans – Breaking down the payment of school fees into smaller, more manageable amounts can do a world of good for parents and guardians who struggle with lump sum payments. It also gives the school peace of mind in knowing that the fees will be paid without having to chase parents and guardians for payment on a constant basis.
  3. Deeds – Second only to Terms of Enrolment, Deeds are the single most useful agreement for schools in recovering school fees. Deeds can be easily incorporated into the package of enrolment documents provided to parents and guardians. A properly drafted Deed can be set out in easily understood English rather than legal jargon. Depending on the terms of the Deed, a Deed will provide the school with enforceable legal rights at a much reduced cost in comparison legal proceedings.

The options above are just a few ways in which the school can recover its unpaid legal fees whilst preserving the relationship with parents and guardians. For help with any of the informal recovery methods listed above, contact the Debt Recovery team at Matthews Folbigg on 9635 7966 [...]  READ MORE →

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The Schools Blog: Part 1 – Starting terms the right way

Terms of Enrolment are often thought of as a mere form in an enrolment pack. The value of Terms of Enrolment go beyond this: correctly drafted agreements are fundamental to establishing enduring relationships between your school and potential parents and guardians. This the case where the Terms of Enrolment set the expectations for your school and the parents and guardians so that if things do go wrong, there is no ambiguity about the rights and responsibilities of your school in recovering fees and continuing education. [...]  READ MORE →

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Creditor’s Statutory Demand Threshold: What It Is and How to Use It

By Kim Nguyen, Solicitor of Matthews Folbigg Lawyers, in our Insolvency, Restructuring and Debt Recovery Group.

On 15 February 2021, the Treasury released a consultation paper “Increasing the Statutory Demand Threshold” seeking submissions on the appropriateness and impacts of permanently increasing the statutory demand threshold. The consultation period expired on 5 March 2021, however, further information can be found here.

What were the temporary changes?

In response to COVID-19, Federal Parliament introduced insolvency reforms to support small businesses in financial distress.  In March 2020, the Government passed the Coronavirus Economic Response Package Omnibus Act 2020 (Cth) (Coronavirus Act) which temporarily: [...]  READ MORE →