If you operate your own business, you will understand the importance of cash flow and ensuring that you get paid for your work. If someone refuses to pay you, you may find yourself exploring options for recovering a debt.
In Queensland, the formal debt recovery process is structured and is designed to give creditors a fair chance to reclaim money owed while allowing debtors opportunities to resolve disputes.
The first stage in recovering a debt is to issue a letter of demand. This letter needs to set out how much is owed, the reason for the debt and provide a clear deadline for repayment. If drafted correctly, it can satisfy a court that you have attempted to resolve the matter before commencing legal proceedings.
If the debtor fails to respond or pay the debt within the specified timeframe, the creditor can escalate the matter by commencing a claim with either QCAT or the Courts. QCAT has jurisdiction to deal with debts under $25,000. QCAT is less formal than a court and generally results in lower costs for a creditor. However, it remains vitally important that the creditor be prepared and have their supporting material (including invoices, contracts and correspondence) appropriately particularised and filed in accordance with any QCAT directions.
Once the application is filed, QCAT will notify the debtor, who will have the chance to respond. As part of the process of recovering a debt, QCAT may encourage mediation to resolve the dispute amicably. If mediation fails or the debtor disputes the claim, the matter will proceed to a formal hearing where both parties present their case.
If QCAT rules in the creditor’s favour, an order will be made that the debtor pay some, or all, of the debt. If the debtor still refuses to comply, the creditor must commence enforcement proceedings in the Magistrates Court.
At McNamara Law, we can assist and guide you through the entire process of recovering a debt. For more information, contact McNamara Law on 1300 285 888 today.
