Collection processes are commenced in different courts in different ways depending on:

1.             The amount involved, i.e., up to $60,000 in the Local Court and over this amount in the District Court.

2.             Depending on whether the debtor is a company or an individual. In the case of an action against an individual, it is a requirement that the collection process be commenced with a letter of demand.

If the debtor fails to comply with the demand, then you are entitled to issue a statement of claim.

It is to be remembered that there is no guarantee that the process will guarantee payment, for example, a client may have insufficient means to meet the debt. Or you may not be able to locate the person.

If the debtor is a company, it may be that you can commence the process by way of a

Creditor's Statutory Demand (a winding up notice).

This is a notice which demands payment and states that in the event of a failure to make the payment, then the company has committed an act of insolvency, and is deemed insolvent, which will enable you to proceed to winding up the company.

Generally speaking, one will only start with the winding up notice if there were some clear and unequivocal acknowledgment of the existence of .These proceedings are conducted (in our office) in the Federal Court and that Court does not entertain disputed debts. If the process has been commenced in this way, and the debtor, through his solicitor or otherwise, may take out a summons to set aside the demand, it is often wise to consider withdrawing the Winding Up Notice at this stage and commence by way of a letter of demand and statement of claim. If you proceed by way of a letter of demand and statement of claim, and obtained a Judgment, then the winding up process can proceed and will be entertained happily by the Federal Court.

It is also to be remembered that winding up the company has in some way has quite the opposite effect of achieving your objective, that is to say, being paid, because if the company is wound up and a liquidator is appointed, your prospect of repayment is diminished by the liquidator’s capacity to realize assets and pay you amongst other creditors. If however the company has the capacity to pay, this will most often brng them to the table.

Winding up is but one way of executing Judgment against the company.

Once Judgment is obtained, there are a variety of ways in which a Judgment can be executed. Again, as in the case of the company, an individual can be issued a Bankruptcy Notice, which has in many ways the same effect as a winding up notice. That is to say, if the debtor fails to pay within the time prescribed by the Notice, then they have committed an act of insolvency, which will entitle you to proceed to a bankruptcy petition.

Winding up and bankruptcy are pressure mechanisms which normally bring debtors to bear and to respond to the extent that they are able. It is to be remembered that these are expensive procedures and filing fees are high.

The procedures available otherwise in the Local and District Courts are:

(a)          Garnishee, that is to say, requiring the debtor’s bank or one of his preferred debtor’s to pay you;

(b)          Writ of execution, which requires the sheriff to sell goods and chattels and pay you the proceeds of sale.

(c)          Sometimes, in order to determine which way to proceed, one can proceed to have a debtor examined, through the issue of an examination summons. This requires the debtor to come to Court and outline all his assets and liabilities, income and outgoings, so as to then enable you to make your choice as to which way to go in terms of executing Judgment.

This service is only limited obtaining Judgment. All methods of executing Judgment are charged separately from the Schedule scale.

Similarly, you are required to adhere strictly to the steps and stages set out below and any divergence from that procedure, which requires the giving of advice or other assistance by solicitors in the practice will be charged at their normal rates (copy enclosed).