If you are owed money by a debtor who is reluctant to pay, there are a number of steps you can take to try and recover the amount owed to you. It is worthwhile attempting to come to an arrangement with the debtor before you consider legal proceedings for debt recovery in WA, as this may save you significant time and effort if it is successful. However, if your debtor still does not pay you may need to seek further legal advice and commence court proceedings.
The first step in recovering a debt is to contact the debtor and notify them of the debt. You might like to do this informally at first, but eventually you will need to send a more formal letter of demand. The letter should set out what you want and when you want it by, specifically:
The method by which you pursue debt recovery in WA through the Courts will depend on the amount of money you are chasing. Before you commencing proceedings you need to consider a number of factors, and you should always seek legal advice before going to court. A lawyer will assist you with ensuring that:
If your claim is for less than $10,000 then you will need to commence a minor case claim in the Magistrates Court. After filing the claim you will need to serve it on the defendant/debtor, who then has 14 days to file a response. Your matter will then be listed for hearing, at which you are not entitled to have a lawyer represent you, unless both parties and the court agrees.
If your claim is for an amount exceeding $10,000 but less than $75,000, you will need to commence a general procedure claim in the Magistrates Court. You must file and serve your claim on the defendant/debtor, who has 14 days to respond, after which a hearing date is set. You are entitled to legal representation for a general procedure claim as the proceedings are more formal and more strict rules of evidence apply.
If your claim is for an amount exceeding $75,000, you will need to commence proceedings in the District Court. You should seek legal advice before doing so.
If you have commenced proceedings for debt recovery in WA as a minor case claim and the Magistrate has granted you leave to have a lawyer represent you, you will need to pay your own legal fees, even if you win.
If you have commenced a general procedure claim, the Magistrate will generally order that the party who loses is liable to pay the winning party’s costs, however this is not guaranteed. If you are seeking payment of a sum less than $10,000, and elect to commence proceedings as a general procedure claim rather than as a minor case claim, you will be liable to pay your own legal fees, even where you win.
Sometimes, even after the court has awarded judgement in your favour and ordered the defendant/debtor to pay you the amount they owe, they still won’t pay. What then? The next step is to commence enforcement proceedings in the Magistrates Court, either by a means inquiry or property (seizure and sale) order. You will need to commence enforcement proceedings within 12 years of obtaining judgment, though after 6 years you will require the leave of the court to proceed.
A means inquiry involves requiring the defendant/debtor (now referred to as a “judgment debtor”) to appear before the Magistrate to answer questions regarding their financial position. The Magistrate will then make an order about how the judgment debtor is to repay you (ie. as a lump sum payment; in instalments; or not at all, if the court determines they cannot afford to). If the judgment debtor still fails to pay, you will need to seek legal advice.
A property order authorises the sheriff or bailiff to seize and sell the judgment debtor’s personal property and real estate in order to pay the debt. It is your responsibility to ascertain whether the judgment debtor has sufficient property to sell and whether such an order will be likely to succeed. You should seek legal advice before obtaining a seizure and sale order.
Obtaining legal advice before commencing debt recovery in WA is vital. Our experienced debt recovery Solicitors at Go To Court Lawyers will assess your case to determine the best way forward, and assist you in pursuing your claim in any way you require. Call us today on 1300 636 846 to arrange an appointment.