Debt Collection and Legal Debt Recovery in Australia – Your Questions, Answered

How easy would it be for a layman a normal person to go through the processes of collecting their debt all the way?

Well I guess it depends on how much the debt Mandy is but it would it is theoretically possible for you to do that but there’s a lot of complicated steps that you need to follow to achieve that end result and also you don’t know in the first instance whether or not the first legal action that you Institute will actually recover the debt or if you’ll have to go to after the first legal action which is filing a statement of claim you’ll have to go to filing reposition for savings or garnishee of wages or if it turns out that the debt is insolvent if you have to go to bankruptcy proceedings or if it’s in the cases of a company did it or whether the thing entity that owes you money is a company you have to file proceedings which are where you issue a credit a statutory demand against the company and you and then if they don’t respond to the creditors statutory demand you can file an originated process to wind up the company

A debt collector can charge a commission but lawyers because of law society rules can only charge for their time so they can’t charge commissions

There are some debt collection companies which are very closely associated with debt collection lawyers specialist equation lawyers and in some cases the owners of debt collection company might actually be the owner the little firm.

When would you go from working with a debt collection agency?

The roles of the debt collection agency fulfills in the — process that they normally initiate the referral and then they make phone calls to the person who owes the money and request that they pay in those phone calls and then the next step would be that they would put something in writing by sending a payment reminder letter or a letter of demand and then if those written steps fail that’s when the matter would be referred to a lawyer and the legal proceedings would begin

A debt collection agency can click I think they have a debt collection success rate of about 15-20%

So purely by intimidation?

Yeah the tactics that they use or yeah well just the fact that the matters been referred to a debt collector and that the person now takes the matter more seriously visits

A debt collection lawyer because they only charge hourly rates can actually be cheaper than the application agency because they don’t show a declaration agency will normally charge Commission

And if there is the need to go beyond the leap beyond the initial debt collection process and into the legal process then that facility say is all

What amount of money should someone consider using a lawyer over a debt collection agency?

The basic jurisdictions that of the chord simulation two amounts of money now that in New South Wales you have the local court which deals with matters of up to $10,000 you have the district court which deals with matters between $10,000 and $750,000 and then any matter involving in a map over $750,000 is referred to the Supreme Court immediately and then you also have matters of federal jurisdiction which involve bankruptcy or company winding up and they can be for any amount over $2,000 at the moment but that’s seem to be changed to $10,000

When would someone let’s say that Oakland when we win they can see the debt collection lawyer as opposed to debt collection agency?

The hope that it would be might be cheaper than unity maybe like a leaf it’s what maybe it’s probably about three thousand dollars.

At that rate, say for three thousand over date, a debt collection agency might charge a thousand dollars in Commission to collect the debt but a lawyer would charge probably it might I mean it depends on how many hours it takes them to do the work but it might take them an hour of work and leave them to yeah or even if it even if they charged five hours worth of between three and five hours work that would add up to about $2,000

Better to use a lawyer when your debt is about $3000?

So mainly that question agencies work with smaller debts?

Yeah although part of the appeal of declaration agencies for corporate clients is that they package their debt collection processes and infrastructure together for do corporate creditors who have lodged debt portfolios that they need collected

So yeah so like large institutions like banks or insurance companies or government department, civil, communications companies they will employ debt collection agencies because the debt collection service can be provided to them on a large corporate scale whereas for the individual it might not be as effective but for a company as an institution it is.