Protecting your interests
A loan is a contractual agreement between a lender and a borrower that regulates the terms under which money is lent and repaid. Loan agreements can be simple or they can incorporate several complex elements such as security, PPSR registrations, guarantees, interest, default provisions and many more.
Aditum Lawyers can assist you with drafting, reviewing and negotiating a wide variety of loan documents and will assist you in getting the best possible outcome. We recommend speaking to our Sydney business lawyers before entering into a loan agreement to ensure that you are fully informed and protected.
Aditum Lawyers understands that the day to day running of your business doesn’t leave much time to for chasing up debts. Our dedicated Sydney business lawyers are here to take care of your debt recovery matter so that you can stay focussed on what’s important.
We can assist you with a wide range of matters across insolvency and debt recovery, providing advice and drafting the relevant documents such as:
Letter of demand – a formal request for payment issued to the entity that owes you money. This is generally the first step in the debt recovery process and can often lead to the amount being recovered without the need for further action.
Statement of Claim – the first step to initiate court proceedings for debt recovery. Initiating proceedings in the Local, District or Supreme court will be determined by the amount being sought. This process is regulated by the Uniform Civil Procedure Rules 2005 and can be complex.
If a Defence is not filed within 28 days of the Statement of Claim being served on the Defendant, the Plaintiff can apply for a Default Judgment. This is an order made by the Court that the Defendant must pay the Plaintiff a certain sum of money (“Judgment Debt”) and it is enforceable without the matter having to be heard in Court.
Enforcement of the Judgment Debt – is the next step in debt recovery, which is possible after a judgement has been obtained. There are several ways to enforce a judgement debt and the most appropriate course of action will depend on the circumstances. Aditum Lawyers can assist you in enforcing a judgement debt through a Garnishee Order, Writ for goods or property, Examination Order, or Bankruptcy Notice.
Bankruptcy Notices – can be issued for debts of $10,000 or more. A debtor will have 21 days to respond to the Bankruptcy Notice or they will have committed an act of bankruptcy.
Creditor’s Petitions – are filed by a creditor within 6 months of a bankruptcy act being committed. The court can then make a Sequestration Order which would render the debtor a Bankrupt. In this event, a trustee is appointed to administer the Bankrupt Estate and the creditor will be able to claim against it.
Statutory Demands – are issued to companies under the Corporations Act 2001 where debts of at least $4,000 are owing. The debtor will have 21 days to respond to the demand, at which point the creditor may make an application to commence winding-up proceedings in the Supreme Court.
Winding-Up Applications – can be made by a Creditor in the Supreme or Federal Court under s459A and s459P of the Corporations Act 2001 based on the presumption of insolvency in light of the Debtor’s failure to comply with the Statutory Demand. This must be done within 3 months of the company being presumed insolvent.
Aditum Lawyers are dedicated to helping you in the way you need it. We don’t just take the time to understand you legal matter, but your entire business model and how best to work with you.
Contact us today for a confidential discussion about your loan and debt recovery matter on 02 8593 8326 or submit an online enquiry to get started.
Yes, you will be able to recover your legal costs for the enforcement of a debt as well as any interest, late fees and charges.
In situations where the debtor cannot afford to repay the debt you may want to consider offering a payment arrangement or settle the debt for a lower sum. This is not ideal but can often be a preferred outcome when compared with the costly and time consuming process of debt recovery. There are a number of options available to you before having to write off the debt entirely including garnishee orders, writ of levy on property and examination orders. Unfortunately, you cannot get blood out of a stone and if there is no security for your loan and the debtor has no assets or cash then it will be difficult to recover the amount.
If you are lending money, whether it to be a friend or family member, we strongly recommend recording the details in writing. If the amount is significant you may even want to consider speaking with one of our business lawyers to help you understand what protections are available.
At a minimum you should record the amount of the loan, term of the loan, repayment requirements and any other details you may want to include such as interest, securities etc.
This will at least assist you later in proving the debt should the need arise.
If someone has claimed a debt against you, sent a letter of demand or initiated proceedings and you do not agree with the debt, you have the option of challenging it. You can open a dialogue with the party and explain to them why you feel you do not owe the alleged debt. If they do not accept this and proceed to court then you will be able to submit your argument in court. Be mindful that if your argument is not legally sound then you could receive an order for costs against you.
Under no circumstances should you ignore any notices or letters alleging a debt as this will allow the creditors to escalate the matter without your participation.