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Clearing your debtor ledger – Get in touch with your not too friendly Debt Collection Lawyer!

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

Do you hate debt collection? Do you have a list of debt collection tasks that is getting longer every day? Have you been unable to accomplish the critical debt collection part of debt collection? If only debt collection were easier, and there was some way of moving those pesky debtors off the debt collection ledger! And don’t forget the cashflow side of debt collection – wouldn’t you like to have a bit extra cashflow back in your budget? [...]  READ MORE →

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Responding to Debt Collectors

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

If you receive a letter of demand from a debt collector, you might be wondering what you should do and whether you should respond to the debt collector. We have set out four helpful tips below which might assist you to respond to debt collector correspondence.

  1. Do not ignore the debt collector!

Whilst it might be daunting or scary receiving a letter of demand from a debt collector, you must ensure that you read the letter of demand and consider the claim being made against you. If you do not respond to the demand, it is likely that the debt collector may proceed with commencing proceedings against you. Debt collector proceedings and judgments can have unintended consequences, including being recorded on your credit profile, or leading to bankruptcy, so it is important that you take steps to deal with the debt collector’s claim as soon as possible. [...]  READ MORE →

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SHOULD I INSTRUCT A LAWYER FOR DEBT COLLECTION?

At Matthews Folbigg Lawyers, we have a team of lawyers and clerks ready, wiling and able to cater for your debt collection requirements.  Aside from being lawyers, members of our team have been involved in debt recovery for over 30 years, helping companies and individuals recover monies due and owing to them working with finance companies and mercantile agents seeing first hand the nuts and bolts of dealing with debtors.

This experience has given us a boost in assisting our clients to recover monies in-house up to the management of a full blown hearing where the debtor defends everything from non-supply of goods to alleging that the goods supplied were defective.  It also allows us to give you advice on the implications of debt collection, so you can make practical, commercial decisions. [...]  READ MORE →

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DEBT RECOVERY – HOW FAR CAN YOU GO?

Any customer or client that owes you money outside of normal trading terms is an understandable source of frustration. That frustration is compounded when the individual company involved is clearly more than capable of paying, has not raised any issues with the quality of the products or services you have supplied, and is behaving as though non-payment of debts is a normal and acceptable part of doing business.

Even though the temptation is to adopt a non-compromising, even aggressive method of debt recovery in these cases, it is wise to stop and consider the restrictions imposed on debt recovery in NSW. If you fail to do so you may unwittingly breach legislation designed to protect debtors, and get yourself in more trouble than when you started – which I am sure will only make you even more frustrated! [...]  READ MORE →

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When is it too late to collect a debt?

By Ellen Ferris, a Solicitor in Matthews Folbigg’s Insolvency, Restructuring and Debt Recovery Group.

When life gets busy, sometimes we put off important jobs to deal with more pressing matters. But when it comes to debt collection, this can only be put off for so long before debts become ‘statute barred‘. At this point the debts the subject of debt collection are no longer capable of being collected.

Most States and all Territories have time limits within which debt collection must be completed. In New South Wales, if too much time passes and the limitation period expires, section 63 of the Limitation Act 1969 (NSW) extinguishes the debt, meaning recovery of the debt is no longer possible.. [...]  READ MORE →

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Debt Collection – What we are hearing from our clients

Debt Collection – What we are hearing from our clients

Regardless of which industry they operate in, clients are expressing to us a sense of dislocation from their usual business networks. Social isolation has meant that feedback from customers, practical guidance from industry associations and even gossip from colleagues has been harder to come by. Under these pressures it is easy to feel as though your business challenges are unique to you.

If COVID-19 has led you to put debt collection down your business priority list you are not alone. Most of the business owners we have spoken to are: [...]  READ MORE →

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Money for Nothing? Or, Something Instead of Nothing.

By Ellen Ferris, a Solicitor in Matthews Folbigg’s Insolvency, Restructuring and Debt Recovery Group.

Before commencing potentially costly court proceedings, there are a number of debt recovery options which should be canvassed by a wise creditor. One such option is that of a payment plan, or payment arrangement.

The benefits of a payment plan include;

  1. Regular payments from the debtor assisting with cashflow;
  2. Debtors are more likely to be able to repay a debt when it is broken down into smaller repayments;
  3. Potentially keeping relationships with valued customers;
  4. Opens up a channel of communication with the debtor;
  5. Avoiding disputes over the amounts owing.

A payment plan can take the form of an informal arrangement, or even just simply letting the debtor pay the debt off in smaller amounts without objecting or suing for the balance. On the other hand the terms may be set out in a formal deed.  There are advantages and disadvantages to both approaches, and much will depend upon which of the benefits set out above are most attractive to the creditor. [...]  READ MORE →

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BANKRUPT MAN CONVICTED OF CRIMINAL OFFENCES

By Darrin Mitchell, Senior Associate at Matthews Folbigg in the Insolvency, Restructuring and Debt Recovery Group

The idea of bankruptcy began in England in the early sixteenth century when merchants and traders conducted business on credit.  A bankrupt person could face imprisonment until released by the Lord Chancellor after disclosure of all debts and various tasks had been completed.  In the late seventeenth century Lord Kenyon reasserted the old sentiment that “Bankruptcy is considered a crime and a bankrupt in the old laws is called an offender.” [...]  READ MORE →

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Criminal and civil penalties for creditor-defeating dispositions: Illegal Phoenixing Amendments 2020 #6

By Andrew Hack, Solicitor, and Stephen Mullette, Principal, of Matthews Folbigg Lawyers, in our Insolvency, Restructuring and Debt Recovery Group.

As discussed in previous blogs in this series, both directors and external advisers have a duty to prevent creditor-defeating dispositions. Not only are they potentially liable for compensation, additionally they are liable for fines as well as it being a criminal offence. An offence could result in a maximum prison sentence of up to 10 years. The intention element is satisfied if a person has knowledge, intention or recklessness of the disposition being a creditor-defeating disposition. [...]  READ MORE →

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Defences to Creditor-Defeating Dispositions: Illegal Phoenixing Amendments 2020 #5

By Andrew Hack, Solicitor, and Stephen Mullette, Principal, of Matthews Folbigg Lawyers, in our Insolvency, Restructuring and Debt Recovery Group.

In our last two blogs we discussed the liability on directors and third party facilitators for failing to prevent creditor-defeating dispositions. We now discuss the defences that may be available to directors and third party facilitators who would otherwise be liable.

Extension of market value

As mentioned in our previous blogs, the definition of ‘market value’ is extended to include the concept of the ‘best price reasonably obtainable’. The objective is to take into account circumstances where a company has an urgent need of cash-flow and may not be in a position to sell its assets at the market price, such as that deemed by a qualified valuer. If a company considers it is forced to sell off an asset which may be at a price less than real market value, due to time constraints in needing to realise cash, companies and advisers should consider making careful records evidencing the steps taken to attempt to realise it for as much of its market value as possible. This should include the circumstances the company was in requiring it to sell the asset potentially at under value. [...]  READ MORE →

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Virgin Australia – What Now?

By Anica Cunanan, Law Clerk and Darrin Mitchell, Senior Associate, of Matthews Folbigg Lawyers, in our Insolvency, Restructuring and Debt Recovery Group.

In our first article on the voluntary administration of Virgin Australia we looked at the appointment of the voluntary administrators and the impact the appointment would initially have on the company.

We also looked at the role of receivers and external administrators including liquidators, and voluntary administrators, defining the roles that the different types of administrators can play in the restructuring of a company in distress. Our first article can be found here. [...]  READ MORE →

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COVID-19 –What Debt will Scuttle Passage to the New Safe Harbours?

By Ellen Ferris, a Solicitor in Matthews Folbigg’s Insolvency, Restructuring and Debt Recovery Group.

Amendments in March of this year have brought about changes to the Corporations Act 2001 which allow for an additional temporary safe harbour to protect directors from insolvent trading, –  see our blog here.

However, companies do not automatically qualify for the protection. To qualify, the debt must be incurred as follows:

  • In the ordinary course of the company’s business;
  • During the six month period starting from the date the new law commenced (being 24 March 2020); and
  • Before any appointment of an administrator or liquidator.

The evidentiary burden of proof is on the person seeking to rely on the safe harbour relief, which means that it will be up to directors to make sure they obtain and keep evidence that their debt meets the criteria. [...]  READ MORE →