Generally speaking, an overdue account should be acted on promptly. The longer it is left, the greater the likelihood the account will need to be written off.
Unless the debtor has a satisfactory reason for delaying payment, the account should be followed up. An assessment ought be made as to any reasons proffered for not making payment.
Consideration may be given to providing a payment plan or a discount if payment is made within a certain timeframe, whilst reserving the creditor’s rights.
In assessing a debt, it can be useful to assess:
1 How long the debtor has been trading and what is the credit history;
2 Does the creditor have assets in its name;
3 Has a guarantee been provided in relation to the debt;
4 Does the debtor have other debts owed; and
5 Why has the debtor not already paid.
Claims for debts less than $100,000 are generally brought in the Local Court of NSW. Larger debts can be pursued in the District Court of NSW or Supreme Court of NSW.
Interest and costs can potentially also be claimed.
There are also limitation periods for bringing recovery action. As a general rule in New South Wales, a claim for breach of contract must be brought within six years.
McAuley Lawyers regularly brings claims on behalf of creditors, and also defends claims. For an obligation free discussion, please call us on (02) 9633 1826 or emailreception@mcauleylawyers.com.au
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