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Do you want to continue litigation against a party declared bankrupt? The Federal Court of Australia provides insight in Yan v Spyrakis as trustee in bankruptcy for Liu [2022] FCA 872

By Aritree Barua, Solicitor at Matthews Folbigg Lawyers.

In Yan v Spyrakis as trustee in bankruptcy for Liu [2022] FCA 872 (“Yan v Spyrakis”), the Federal Court of Australia (“FCA”) re-stated the principles to be applied when considering whether to continue litigation against a party that has been declared bankrupt.

Background

Mr Liu (“the Bankrupt”) was made bankrupt on 11 November 2011 on his own petition. At the time of his bankruptcy, there were proceedings pending in the Supreme Court of New South Wales (“the Supreme Court proceedings”) in which the Bankrupt and a number of related companies were the defendants and Mr Yan was the plaintiff. [...]  READ MORE →

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Replacing a Trustee of a Bankrupt Estate

By Aritree Barua, Solicitor at Matthews Folbigg Lawyers

If you are concerned about the appointment of a trustee of a bankrupt estate, or you have a disagreement with a trustee, or a trustee has decided to retire, you may be able to replace that trustee. This article explores various ways in which you can replace a trustee of a bankrupt estate.

Replacing a trustee by resolution at a creditors’ meeting

If you are a creditor, you can remove and replace a trustee of a bankrupt estate by way of a resolution at a creditors’ meeting (Bankruptcy Act 1966 (Cth) (“the Bankruptcy Act”), Schedule 2 (“the Insolvency Practice Schedule”), section 90-35(1)). Notice of the meeting must be provided to all persons who are entitled to receive notice at least 5 business days before the meeting (Insolvency Practice Schedule, section 90-35(2)). [...]  READ MORE →

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Judgment Debts – The Consequences for a Judgment Debtor

By Jamieson Naylor, Law Clerk at Matthews Folbigg in the Insolvency, Restructuring and Debt Recovery Group.

Becoming a judgment debtor, that is, having a judgment entered against you, can be quite an unsettling notion. However, judgment debtors should resist the urge to ignore a judgment creditor. There are a number of options open to a judgment debtor and it is important that judgment debtors should take steps to deal with a judgment debt as soon as possible. If a court or tribunal has entered judgment in favour of a judgment creditor, then the judgment creditor can enforce that judgment against a person known as a “judgment debtor”. The person with the benefit of the judgment is known as a “judgment creditor”. [...]  READ MORE →

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Filing Fee Rise!

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

There has been a minimal increase in the costs associated with filing documents in the State’s Courts over the past 3 years whilst the country was dealing with the financial ramifications of COVID-19. However, a rise has been imminent.

The NSW Attorney-General has now considered the costs associated with commencing and running proceedings within the Courts of New South Wales and upon evaluating such costs has enacted the Civil Procedure Amendment (Fees) Regulation 2022 (NSW). [...]  READ MORE →

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A PERMANENT INCREASE OF THE BANKRUPTCY THRESHOLD

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

Is having a judgment against a personal debtor enough to serve a bankruptcy notice and bankrupt the debtor? Can you make a debtor bankrupt by serving a bankruptcy notice? What else do you need to know to bankrupt a personal debtor?

A creditor serving a bankruptcy notice is the first step to potentially making a debtor bankrupt. The bankruptcy notice must be based on a judgment against a personal debtor in an Australia court and be less than 6 years old. [...]  READ MORE →

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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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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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GREATER SYDNEY’S 2021 LOCKDOWN: WILL BUSINESSES SINK OR SWIM?

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

Greater Sydney is currently in a lockdown and has remained in the dark with respect to whether, and when businesses would receive some relief.

Last year, the Federal Government introduced the JobKeeper scheme to assist with keeping businesses afloat (including employees within those businesses) through of the payment of wage subsidies subject to certain criteria.

The Morrison and Berejiklian Governments have announced that NSW businesses will finally receive some relief as we enter the fourth week of lockdown in NSW. It is evident that regardless of whether lockdown is in fact extended past 30 July 2021, businesses have already experienced a substantial hit. Should lockdown continue to be extended, we may see plenty of businesses struggling to make it through this lockdown. [...]  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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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 →