Chasing unpaid debts can be a very stressful time, both emotionally and financially. Sometimes the only way to collect debts is to take legal action. However, there are a range of important considerations involved.
What are my rights when large sums of money are owed?
Lawyers may represent you to protect your rights in court and help reclaim the money you are owed.
If you are owed money, you may lodge a claim in the Magistrates Court, provided the debt is also less than $150,000. If the debt amount exceeds this figure, you can seek recourse in the District Court for up to $750,000. The Supreme Court hears cases where the debtor owes more than $750,000.
What if my debt is less than $25,000?
This may be the case for SMEs who have had some commercial agreements go unpaid, or cases between friends or families. There are still procedures in place to get the funds back. You can fill an Application for Minor Civil Debt in the Queensland Civil and Administrative Tribunal. Usually, you may not receive legal representation in such cases but expert lawyers can help manage the process.
What if the person who owes money is declared bankrupt?
They are usually freed from funds they can not pay. In this case, as the creditor, you may make a provable debt claim so you are entitled to a share of the debtor’s funds being distributed. You also gain the right to vote at their bankruptcy related meetings.
If the person owes a particularly large amount of money, they may turn to the Offender Debt Recovery Program. Under this scheme, the money is provided to the creditor and in return the State recovers the payment from the debtor using a liability notice. They are disallowed from converting the debt into unpaid community service or a good behaviour order. However, it is also important to note that a person cannot go to prison for an unpaid civil debt under Queensland Law.