Galluzzo LawyersDEBT RECOVERY

Debt Recovery

If you are an individual or business that is owed a debt, Galluzzo Lawyers can assist in navigating you through the legal processes needed in order to reclaim any money owed to you.

  • Debtor location and tracing
  • Letters of Demand
  • Commencing proceedings in the Consumer, NSW Civil Administrative Tribunal (NCAT), Local Court, District Court and Supreme Court
  • Alternative dispute resolution
  • Drafting and enforcing Deeds of Release
  • Obtaining and enforcing judgements through writs, instalment orders, garnishment, bankruptcy and corporate insolvency solutions
  • Advising and negotiating with liquidators in preference payment recovery disputes and insolvent transactions
  • Assisting asset recovery including obtaining urgent freezing orders
  • Advising on any risk and liabilities in your business transactions
  • Drafting agreements to help minimise any need for debt recovery actions
  • Providing advice on the protection of security interests under the Personal Properties Security Act 2009 (Cth)

Frequently Asked Questions

What is the minimum amount of debt?

There is no minimum amount of debt that is recoverable, however if the cost of recovery is more than the debt itself, then it may not be worth trying to recover the debt.  NSW local courts can determine debt recoveries for amounts up to $100,000.00, District Courts up to $750,000.00 and higher amounts are determined by the Supreme Court.

Is there a limitation date on a debt to be recovered?

Under the Limitation Act 1969 (NSW), various types of debts have different limitation periods. After a certain amount of years has passed, the limitation period of debt recovery expires and an individual is statute-barred from recovering the debt.

Under section 14 of the Limitation Act 1969 (NSW), there is a general limitation period of six years to recover debts which arise out of a contract. A creditor has six years from the time that the cause of action to begin civil proceedings, otherwise their right to recover will expire.

This will also apply to debts owed on a running account basis, meaning that account debts incurred more than six years before the commencement of proceedings cannot be recovered.

If, however, the agreement was made through a deed, section 16 of the Act sets the limitation period as 12 years.

Can the limitation period be extended?

The 6 year limitation can be extended in some circumstances.

The most common of these circumstances is where debtor confirms that they owe the debt before the limitation period expires. To constitute a confirmation under s 54 of the Limitations Act, a person must either:

  • acknowledge the creditor is owed a debt; or
  • make a payment to the creditor as part of the debt owed.

An acknowledgement demonstrates a recognition that a debt outstanding. It must be received by the creditor themselves, or their representative. The acknowledgement can take a number of forms including a letter or an email.

A part payment of the debt is also sufficient to demonstrate that the debtor confirms that an outstanding debt exists.

A confirmation of a debt restarts the six-year period and gives the creditor more time to commence proceedings.

How much does debt recovery cost?

The answer to this question depends on how far the debtor is willing to go in making the creditor chase after the debt owed. Debts can be successfully recovered simply by Galluzzo Lawyers sending a letter of demand. At the other extreme, a debtor company may have to be wound up in liquidation or an individual will have to be bankrupted in order to enforce a final judgment or final order of the Court.

How can I begin recovering debt?

In New South Wales, and in most of Australia, recovering a debt usually follows the same timeline of events. After a debtor (the individual who owes money) fails to pay on time, and amicable communications between the debtor and creditor (the individual who is owed money) do not result in the outstanding debt being paid, the creditor will seek to take legal action to recover what is owed to them.

More often than not, a skilfully worded letter from a solicitor and the prospect of legal action is enough motivation for a debtor to pay the debt owed. A Letter of Demand notifies the debtor that the creditor has instructed us to act for them and has escalated the matter and that Galluzzo Lawyers will commence legal proceedings if the debt is not fully paid by a certain date.

A Letter of Demand sends a strong message, one that demonstrates to the debtor that you are serious about collecting what is owed. It has even more of an impact if it is supported by relevant documents, proving indebtedness such as tax invoices, contracts, terms & conditions

No actual legal proceedings commence until the ‘Statement of Claim’ is filed in Court. The Statement of Claim indicates the beginning of the formal legal ‘debt enforcement process’. This document outlines to the court how much is owed, including interest on the late payment, and documents all relevant evidence proving indebtedness and the debtor’s failure to pay.

Galluzzo Lawyers believes that the most successful debt recoveries are those which are settled through just a Letter of Demand. Our extensive experience in debt recovery and well-known reputation in legal circles means that a Letter of Demand from us will bring more force and credibility to a creditor’s threat of legal action.

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Galluzzo Law Practice Pty. Ltd. trading as Galluzzo Lawyers is a Solicitor Corporation under the Legal Profession Act 2004.

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