A Walkthrough of The Debt Recovery Process in Australia
As a business, it can be frustrating to deal with customers who have defaulted on their debts and are yet to pay you for goods or services that you provided. That is why it is a common practice for businesses to defer debt recovery efforts to debt collection experts.
However, it is important for such businesses to be aware of the debt recovery process and the legal framework that surrounds debt collection in Australia. This can help them make better decisions in terms of managing debt and selecting the best recovery experts to suit their needs. The following is a walkthrough of the debt collection process from start to finish.
Attempts to contact the debtor
The first step towards debt recovery often involves attempts to contact the debtor and remind them of their current debt obligation. The debtor is normally contacted by a trained and professional debt collector who contacts them via phone or other relevant communication channels.
Many legal representatives for your debt collection efforts will charge a fee on a no-win-no-fee basis. This means that if the debt collection is successful, they will charge a small commission at this stage. If not, they will move on to the next step.
Placement of the debt under a debt recovery program
Most debt recovery efforts involve placement of the debt with Debt Recoveries Australia (or a similar debt collection agency) who often act on behalf of you and your legal representatives to attempt to collect the debt.
During this stage, your debtor will be clearly informed about their debt obligations and what the legal ramifications may be moving forward.
Legal action
If your debtor doesn't respond to any of these initial attempts, you can proceed to take legal action via your legal debt recovery professionals. Your legal representatives will determine what assets your debtor has and whether it makes sense to pursue legal channels in order to recover the debt.
Unpaid bills to your business can significantly affect your bottom line. It is therefore important to consider all channels that can minimize your losses. The process can begin with issuing a legal letter of demand that notifies the debtor of the legal repercussions of failing to meet their debt. This often makes most debtors spring into action and fulfill their obligations.
If the debtor is still defiant, your lawyers can file a claim in a claims court and go through legal proceedings to have you compensated even if it means claiming/auctioning their assets.