Debt Recovery in Australia: Know Your Legal Rights

If a person has lent money, and he/she wants to know how they can recover those funds from the debtors, this post is perfect for them. The guide will help individuals understand the mortgage recovery process in Australia.

That way, he/she will know what exactly they can expect in all the stages. If you are one of those lenders, you can also obtain straightforward and honest advice on debt recovery from debt recovery lawyers, who will assist in every step.

Debt Recovery: A Small Definition

When a person supplies a product or offers a service to a particular business, and they don’t pay back for those products or services at the right time, it leads to unpaid debt. One can easily recover those debts by contacting the debtor through:

• Personal contact
• Phone calls
• Emails
• Letters

This process is known as the “debt recovery process”. It will also be an excellent idea to consult with a lawyer in debt recovery as they can provide an excellent service. Also, the action taken for debt recovery is regulated by the Australian Competition and Consumer Law.

The debt collection process consists of many different kinds of approaches and steps. These steps and approaches can help him/her recover all their payments effectively from the debtor.

Apart from that, it’s compulsory for all the debtors to pay the debts which they legitimately owe. This clearly means that lawful and necessary steps will be taken to retrieve the owed funds.

Why Exactly Do the Debt Defaults Take Place?

When a person doesn’t pay back what they owe, this is called being in default. Businesses and individuals can default for a diverse range of reasons, some of which are:

• If they feel aggrieved about the products or services

• Simply ignores paying the debts

• Facing problems with the cash flow

• Insolvency

But when it comes to recovering the debt, the mortgage recovery lawyer always tells their clients to take a realistic and fair approach. They might also find themselves in situations where the debtors start to behave fraudulently.

There are also debtors who are extremely honest and wish to meet all their obligations once they get the chance to do so. It’s important to opt for a flexible approach so that one can make a payment plan where they can enable a long-term option for a refund.

One has to strike a balance between the recovery and also make sure that the debtor does not face any difficulty when making the repayments. You can speak to Property Lawyers Perth to learn about the best ways to collect debts from debtors.

Steps Involved in the Debt Collecting Method 

When a particular debt reaches the phase where he/she has to opt for the debt collecting action, they have to follow certain steps. One must undertake all these steps by themselves. Otherwise, they can hire a professional debt collector to get work done on their behalf.

Now, let’s check what are the steps of recovering the debt:

Step 1: Send a Reminder 

The first thing one must do is just send the debtor a reminder about their unpaid debts. He/she can get this done by calling them, sending them an email or a letter.

Apart from sending them reminders, one should also provide them with the “steps” on how they can effectively make the payment. One can get done when the agreed payment date is decided.

Step 2: Contact the Debtor Again

When the payment still remains unpaid, or the debtor did not contact him/her after sending a reminder, one must contact the debtor one more time.

He/she can do so by sending a letter, email, or just directly calling to let them know about the payment. One must think of contacting the debtor again when the invoice is late for 30 days.

Step 3: Send a Final Notice 

After trying two times and still not getting any response from the debtor, he/she should send a final notice for the payment. The final notice is sent after 45 days, and when all other ways of recovering debt do not work.

It will certainly help to obtain some legal advice from the best property lawyers Perth before you think of recovering the debts. That way, he/she will be well-prepared and on the front foot to pursue the debtor through the court.

Things to Know about Letters of Demand 

In all jurisdictions, the creditors should issue the letter of demand to the debtors right before opting for the court proceedings. When providing the letter of demand, it should do the following:

• Should address the debtor and specify that it’s a letter of demand
• Must mention the amount of debt in detail and how exactly the debt became payable and due.
• Provide a deadline for the debt amount
• Notify the debtor that unless the entire debt has been paid, the credit will proceed towards the tribunal or court.

How to Stop Bad Debts from Taking Place?

In certain situations, bad debts can take place, and it doesn’t matter how well he/she checks a person’s background. But with the help of some steps, one can easily provide their interests right before they get to contract their services. These steps are:

• Conducting background research on the individual or business right before he/she plans to provide them credit. This might include doing some ASIC searches to learn whether or not the individual or business has some previous problems.
• Set up the restrictions on how much a business or individual can buy right before calling up for the payment.
• Provide the payment options properly. One should also mention the consequences that can take place due to non-payment.
• One should stay in contact with the customers regularly, and build excellent relationships with them.
• He/she should incentivise the payment with a percentage off the bill for the on-time payments.
• One should wait for the direct deposit payment to clear away first right before they can ship the goods.

Getting the due diligence done is also extremely vital. When one has some type of issue of being owed debts previously, a reliable and trusted lawyer can help him/her on such matters.

How Property Lawyers Can Help?

At times, it becomes difficult to handle debt collection work, especially when one has to run a business. The entire process will also be pretty challenging when he/she has no skills or doesn’t know the right way to pay the debts.

So, for such situations, consulting the matter with a property lawyer will surely help. It’s because these lawyers have the knowledge, skills and even the license to handle such cases effectively. They can provide him/her with tips and advice.

The lawyers will also tell him/her about the right way to approach the debtor and how he/she can smoothly retrieve their due payments easily. They have already helped many people before, and it’s guaranteed that they offer the help one needs on such matters.

Wrapping Up

Not getting your funds paid on time by the debtor can make a person feel frustrated. The best way he/she can collect the debt is by sending letters, emails, and even calling them to let them know about the due.

Individuals who wish to learn more about the debt recovery process can speak with property lawyers Perth WA, without fail. They will get to know the type of issue he/she is experiencing and will proceed further with the case.