Someone owes you money and you’re struggling to get the money back? Whether it’s an unpaid invoice, a bounced loan, or rental arrears, getting what’s owed to you can be a nightmare. That’s where we have debt recovery lawyers for that.
According to a report from the Australian Bureau of Statistics (ABS), in 2021–2022, the average household debt increased by 7.3% to $261,492. Australian household debt has grown significantly over the last 20 years and is now higher than most in the world. The main reason for the increase in family debt is mortgage debt.
Debt Recovery Laws in NSW
The Australian Securities and Investment Commission (ASIC) and the Australian Competition and Consumer Commission (ACCC) regulate the Commonwealth’s consumer protection laws for the debt-collection agency or industry.
In general, if the underlying debt is related to the provision of a financial service – including a credit facility – then ASIC will have jurisdiction. If the debt is for the supply of goods and services other than financial services then the ACCC will have jurisdiction.
Australian Competition and Consumer Commission (ACCC)
ACCC regulates and administers consumer protection laws for debt collection. When a debt is for goods and services other than financial services or products the ACCC is responsible for debt collection misconduct.
These services include:
- telephone or other utility services
- services of trades and professional people
- when a retailer doesn’t require immediate payment for a product (but not when the customer enters into a finance agreement as that will be ASIC’s responsibility).
- Debts or outstanding debts from a delayed payment (such as a client who receives a monthly bill or payment extension) are also under the ACCC.
Australian Securities and Investment Commission (ASIC)
When a debt is for a financial product or service ASIC is responsible for debt collection misconduct. For example:
- credit card accounts
- home loans, personal loans, and loans from retailers for motor vehicles, household goods or other purposes
- fees for financial advice, insurance, and other financial products and services.
Any claims of harassment, coercion, or unethical behaviour in relation to debt collection, or any false statements made about a debt fall under ASIC’s jurisdiction. It includes debt related to a financial service that has been transferred or sold to another entity (a debt buy-out company).
As it’s not a financial product or service, any misleading or deceptive conduct about the real good or service (the car or appliance) and not the debt itself will be reported to the ACCC.
GUIDELINE: ASIC’s Debt Collection Guideline: For Collectors and Debtors
When to Get a Debt Recovery Lawyer?
While debt recovery is generally a ‘do-it-yourself’ process for simple cases, getting expert help for complex cases from debt recovery lawyers in NSW may be the best option. Here are some instances when you may need to get a debt recovery lawyer for your case:
- The debt is significant (tens of thousands or more) and the potential recovery is worth involving a lawyer.
- If the debtor disputes the debt amount, service provided, or validity of the contract, legal arguments and evidence will be needed. A lawyer can represent you in court.
- A guarantor is involved (someone who promised to pay the debt if the debtor defaults). Legal complexities may arise in this situation. Debt recovery lawyers can guide you through the process.
- If the debtor is outside NSW, interstate legal procedures will be required. An attorney with experience in these types of matters can handle the legalities.
- The debtor is unresponsive, avoids communication, or shows no intention to pay. A lawyer’s expertise in successful debt collection strategies and legal action is essential in this matter.
- If you’ve already tried debt collection yourself (demand letters, filing court documents negotiation) and failed, a lawyer can explore more forceful legal options.
- A lot of time has passed since the debt became due, and legal limitations may apply. A lawyer can advise on the viability of your claim and the best course of action.
- If you think the debtor has assets that can be used to pay the debt, debt recovery lawyers can help you identify and secure them through court orders.
Services Offered by Debt Recovery Lawyers
Here are some of the services debt recovery lawyers offer to their clients:
- Draft Demand Letters. Lawyers can write strong, legally compliant demand letters outlining the debt recovery process and demanding payment within a certain timeframe.
- Negotiate with Debtors. They can represent you in negotiations with the debtor to get a favourable outcome that avoids court proceedings.
- ADR Options. Lawyers can advise on and facilitate alternative dispute resolution methods like mediation where a neutral third party helps reach an agreement instead of going through legal proceedings
- Gather Evidence. They can help collect and collate evidence for your claim like contracts, invoices, and communication records.
- File Claims. Lawyers can initiate a debt recovery case by filing a claim with the relevant NSW court (Local, District, or Supreme) depending on the debt amount.
- Court Representation. Lawyers will represent a debt collector in court, and present evidence and arguments to the judge to get a favourable outcome. It’s important to note that courts will only entertain certain amounts of debts. Below is a guide:
- The Magistrates Court: Debts amounting from $25,000 to $150,000
- The District Court: Debts from $150,000 and $750,000
- The Supreme Court: For debtors who owe more than $750,000.
There are other options for debt recovery lawyers such as external dispute resolution (EDR) agencies and government-funded dispute resolution services.
Get a Debt Recovery Lawyer From Our Law Firm
If you’re in a difficult debt situation in NSW, don’t spend time and energy chasing unpaid invoices or dealing with unresponsive debtors yourself. Our debt recovery lawyers at JB Solicitors have a proven track record on debt recovery process and handle the legal matters for you. We can also collaborate with debt collection agencies who you may have contacted first.
Call now and get legal expertise if a debtor fails to pay you.
