 Debt recovery has to be done methodically if it is to be successful. If a Debtor will not pay, despite a number of demands for payment, you have 2 choices, Either: You can write the debt off; or, You can take further action to collect the money from the Debtor. The only way to pursue the debt when the Debtor refuses to pay, is to get a Court judgement which provides you with a number of options to enforce payment. There are a number of debt recovery options after you obtain a Court judgement. Click this link for a discussion of these options. When pursuing a claim for money owing to you, it is important that you start in the right Court. Each different Court has what is called Jurisdiction. This is the legal description of what matters can be dealt with, in that particular Court. The Jurisdiction also defines the monetary value of the amount of the claim, that may be dealt with in a particular Court. Below is an overview of: The different Courts and what they can deal with, A description of the various people in the Court system, and what they do, and, A description of some of the various documents in the Court System. WHAT COURTS ARE THERE IN NSW? In NSW, there are 3 levels of Court. The Local, District and Supreme Courts. Unless your claim is worth a lot of money, you will rarely go to the Supreme Court, so the focus will be on the Local and District Courts. The Local Court has Jurisdiction to hear and determine claims up to $60,000.00. The District Court is the Court you will choose if the claim is over $60,000.00. Local Court The Local Court has 2 Divisions for debt claims: The Small Claims Division, and the General Division. Small Claims Division in the Local Court is for claims under $10,000.00, and is procedurally different to the General Division of the Local Court. If you want to read more about the debt recovery procedure in Small Claims, click this link. General Division in the Local Court is for Claims above $10,000.00. If you would like to learn more about the procedures in the General Division, click this link. Therefore, if your claim is under $10,000.00, you should file in the Small Claims Division of the Local Court. If your claim is between $10,000.00 and $60,000.00 you should file in the General Division of the Local Court. WHO ARE THE PEOPLE IN THE COURT? In the Local court system, there are a number of different people with different powers. They are: Clerk of Court- is in charge of the smaller Courts, which usually don't have a District Court attached.They have limited powers to make certain decisions. Registrar- is in charge of the larger Courts where there is a District Court attached. They have the power to make a number of decisions. In Court you address them as Registrar or Sir/Madam. Arbitrator- is appointed by the Courts and is usually a private legal practitioner. They hear claims referred to them by the Registrar, and have the power to make a judgement or determination of a claim, which is binding on the parties, unless a Notice for Re-hearing is lodged. During a hearing you call them Mr, or Ms Arbitrator. Magistrate- is equivalent to a Judge in the Higher Courts, and in Court is called Your Honour. District Court If your claim is over $60,000.00, you should file your claim in the District Court. Click this link to read more about the procedures. In the District Court, there are Registrars and there is also Arbitrators. The Judge is called Your Honour in Court. The Court has a number of different divisions in which you file your claim, dependent upon how the debt arose in the first instance. It is important for successful debt recovery, to file in the correct division when preparing and lodging your claim. For a debt of this amount, it is strongly advised that you engage a solicitor or lawyer to represent you. WHAT ARE THE COURT FORMS? There are a number of different forms used in the Court process. They are: Statement of Claim- If the debt is for money, which can be ascertained, it is called a liquidated claim. If the amount owing cannot be determined, it is called an unliquidated claim. In debt recovery, you will usually make a liquidated claim. Summons-This is the form to use in certain specified claims in the Court. It would not normally be used for debt recovery. Notice of Motion-This is what is called an interlocutory application. It is the form used to seek orders from the Court. If it is used before a Claim is filed, it will usually be used to to obtain information. Once a claim is filed and an action commenced, it is used to get the Court to make directions or orders, in regard to the conduct of the action. An example would be if one party refuses to provide information. A notice of motion would be used to ask the Court to order that party to provide the information. Affidavit-This is a sworn, or affirmed statement prepared for a witness to an action, of the evidence they will provide, which is used to provide primary evidence for a hearing. In Small Claims, it does not have to be sworn or affirmed, and is called a statement of evidence. Subpoena-This is a Court sealed document directed to the other party, or anyone else, to either attend the Court and give evidence, or to provide documentary evidence in their possession, to the Court. Finally Successful debt recovery from debtors who just won't pay, depends on getting a court judgement to seek enforcement. It is important that any claim is started in the right Court.
Debt recovery can be difficult, and it requires the right planning,
approach, knowledge and experience to maximize your prospects of
collecting the money. Let the professionals carry the burden.
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