If someone owes you money or has some of your property in their possession, there are a number of steps you can take to recover this – and going to Court sometimes isn’t the best first-up solution.
Firstly, in order to save costs, it may be appropriate to discuss the matter with the other person. Sometimes just talking it out reasonably can help you to reach some satisfactory repayment terms (like making a number of payments in a period, or repaying the debt by a certain date). This however may not always be possible if the relationship has soured or the other person becomes increasingly aggressive about the situation – often, chasing debts can cause a lot of friction in a relationship and friendships can break down if debts are not repaid.
If talking to the person is not possible, you can send a letter of demand, and this should be the first step in any recovery for money or property. A letter of demand should include clear details of how much the person owes or the property needing to be returned, a date/timeframe that the money must be paid or property returned and what action will be taken if that does not occur by the selected date/timeframe.
Following a letter of demand, if the money has not been paid or property not returned, it may be appropriate to take legal action. This will require the completion of a Statement of Claim to be filed with the appropriate Court. Because debts can range in size, you might need to file in a certain Court or Division:
If the Debt or Property is valued at less than $20,000, in the Small Claims Division of the Local Court;
If the Debt or Property is valued between $20,001 and $100,000, in the Local Court;
If the Debt or Property is valued between $100,001 and $750,000, in the District Court;
If the Debt or Property is valued at $750,001 or higher, in the Supreme Court.
This guidance is based on a recovery in a New South Wales Court.
There are risks associated with going to Court such as the payment of fees which may not be recovered if you lose or if the person is not in a position to pay the money. There is little benefit in pursuing a debt against a person who you know will not be in a position to pay – whilst you might be successful, it will be a Pyrrhic victory!
A six-year time limit applies for recovering money or property. There are exceptions to this rule however you should consult a lawyer if you are outside this timeframe.
If the Dispute relates to tenants and landlords, or traders and consumers, then it may be able to be dealt with by specialist tribunals.
Do you have more questions about recovering some debt or property? In our free first consultation we can advise you on:
- Whether it is worthwhile to pursue the debt;
- Matters to consider when pursuing the debt;
- The Costs which can be involved in pursuing a debt;
- Options to recover the debt without commencing Court proceedings.