how does it work?
Our efficient debt collection services streamline the recovery process, ensuring swift resolution and maximum returns for our clients.
the psychology of debt
Some debtors fail to pay because they suddenly and unexpectedly find themselves without the funds and simply need more time to pay. Others are unhappy with the product or service they obtained from you and flatly refuse to pay. Some chose the wrong product and hope to avoid the consequences of their own poor decision by leaving you to carry the debt. Some are just hopeless organisers and need a regime of payment imposed upon them. Far too many are simply unprincipled people who will do almost anything to try to wriggle out of paying you.
Many debtors will fob off or ignore your demands and will only take you seriously if you involve a professional third party such as a lawyer. Once you involve a professional third party some debtors realise that you are determined to obtain payment and they will begin to co-operate.
Too many creditors write off their unpaid debts too readily. The result is that many debtors have learned that they can avoid paying their debts by simply holding out against the normal requests and demands a creditor will make. Requests and demands are only as good as your willingness to back them up with legal action. In the past, many creditors have avoided going as far as taking legal action because they had previously been "burnt" by runaway legal costs spent chasing hopeless cases.
persuasion
The law requires that an appropriate demand for payment be made upon a debtor before legal action can be taken. As a responsible creditor, we presume you will have made a polite inquiry of your debtor to find out why payment has not been made and that you will have some idea of the debtor's reasons for not paying. If payment is still not made to you, you should write a letter setting a specific date and time as a deadline for final payment and warning the debtor that legal action will be taken if that deadline is not met. You may include in that letter a suggestion that the debtor contact you to discuss any difficulties they may have with the debt. We presume that you will not refer an unpaid debt to debtcollect until you are satisfied that legal action needs to be taken.
Some businesses find that debtors will ignore their demands but respond to a solicitor's demand. For that reason you may wish to avail yourself of our low cost Solicitor's Notice of Final Demand. The law, however, presumes that you can and will make your own demands for payment upon the debtor and, therefore, does not allow you to claim the cost of our Notice of Final Demand from the debtor. We ask that the debtor pay it for you as a matter of honour but you have no right to insist upon them paying it.
If the debtor has "skipped" town and cannot be found from our own data base, we may suggest and arrange skip tracing to try and find the debtor's current whereabouts.
legal force
Once you refer a matter to us to commence immediate legal action, we will send to you by email an estimate of the fees charged by the court and the process server (these are called "disbursements"). Once you accept the quote, we will have our lawyers immediately prepare and file in the Court a civil action and arrange to have the documents served on the debtor.
The document prepared, filed and served is called a Statement of Claim and it requires the debtor to not only pay the amount of the debt but also the disbursements, statutory interest (if the debt is more than $1,000.00) and a prescribed amount of legal costs to our solicitor. From this time on, the debt is in our solicitor's hands and you should avoid dealing directly with the debtor. Your accounting system now stops and the Court's accounting system for legal action takes over. You must no longer send regular statements to the debtor as these are likely to contradict with the Court documents.
Once served, the debtor has 28 days in which to pay the debt, make arrangements to pay, settle the matter through negotiation or file a defence and fight the case. We will keep you informed of progress and advise you appropriately. If the debtor pays, they are required to pay the money to us and we will account to you immediately. If the debtor offers payment by instalments we will ascertain the appropriateness of such an offer with regard to the debtor's real ability to pay, we will inquire about the debtor's sources of income, savings and assets and liaise with you regarding acceptance of that offer.
If the debtor ignores the Statement of Claim, we will apply to the court for a Default Judgment and then take appropriate enforcement action to have the money legally acquired from the debtor. We do this by having the Court send the Sheriff to seize and then sell the debtor's goods through the issue of a Writ for the Levy of Property.
We can also issue through the Court a Garnishee Order to seize money from the debtor's bank savings wages. We will usually also send the debtor a court document called an Examination Notice which requires him to disclose his financial situation in writing to us directly within 28 days. If he fails to do so (as most do), we can then have him summoned to appear before the Court to be questioned pursuant to an Examination Order. If he still fails to attend Court, we can arrange to have him arrested under a Warrant of Apprehension and physically brought to court to be questioned about his finances.
The court will seek various minor fees and charges for different types of enforcement action which you may need to pay prior to the enforcement action being taken. In relevant cases we will advise you about commencing bankruptcy or company liquidation proceedings although we will usually only take such action in extreme cases. At each stage of the action, our solicitor is permitted by law to charge legal fees to the debtor for the work undertaken.
If the debtor fights the case he must prepare and file a Defence which sets out the details of his argument. If this happens, our solicitor will obtain full particulars of the proposed defence, advise you as to the legal prospects of success and liaise with you about the commercial viability of proceeding.
In most cases, the court will order the unsuccessful debtor to repay to you all the legal costs which you incurred. Many of our clients find that, when the debt is paid at the end of a legal action, the whole process has cost them no more than the initial fee! Many are surprised to have received interest on the debt which often off-sets our flat fee and can create a "zero cost" result.
The debtcollect system has been developed and optimised to provide a most affordable legal service for the collection of personal and business debts.
debtcollect is not a commercial agency so we don't charge any commission on what we collect for you.
Ask us to issue a Notice of Final Demand and if the debt remains unpaid, you can request that we instruct our solicitors to take Immediate Legal Action.