in South Australia
Issue No. 6 - July/September 2002
Debt Recovery Options in South Australia
by Jamie Watts and Sharon Trounson
It is not unusual that a business needs to consider debt recovery options, beyond letters of demand. With the following knowledge, you will be able to approach your lawyer in a more informed and prepared manner, knowing:
- what information the lawyer needs to do the best job for you;
- what your options are;
- the procedural delays you might encounter.
- the cost effectiveness of the various options
Before considering the best approach to recovering a debt, pull together the basic information.
Who are the parties? This is not always as easy as you might think. Gather the source documentation together for your lawyer to look at: invoices/order forms and the like.
What is the amount/nature of the debt? Has the debt become due? Was there an event that needed to occur before the debt became due? For instance, guarantees may need a demand to be issued before you can rely upon them. Prepare a schedule of the items making up the debt.
Does the debtor have assets? You can carry out various searches to find out if a tenant has assets. There is little point in spending money on chasing a debt if the debtor can’t pay. You can carry out the following searches:
- LTO searches – interest in real property
- ASIC – shareholding
- Boat/car registration
Such searches are an indication of a debtor’s assets, at best; they are not definitive.
Decide what action is appropriate
Is it possible to recover the debt by “self help”, such as enforcement of a security or a letter of demand on solicitors letterhead? If you are a landlord you could consider distraint and re—entry.
If self help is not possible, then you need to consider other options.
If the debtor is a corporation, then you can issue a statutory demand (subject to the matters set out below) or issue proceedings.
If the debtor is a natural person you are confined to recovery of the debt by issuing p...
