Posted by: Angelo Venardos | Date: 5 December 2013
If you are owed money there are various measures that you can take to recover it. These measures depend on whether or not an individual or company owes you the money. If an individual owes you money the best initial step to take is to issue a letter of demand to that individual. The letter of demand should be carefully drafted and clearly outline the debt that is due and owing and the reason why it is due and owing.
If a letter of demand is not responded to or is not responded to favourably then, once the time period stipulated in the letter of demand expires, you are then within your rights to commence proceedings against the individual that owes you money in either the Magistrates Court, District Court or Supreme Court.
The Court that you commence proceedings in will be determined by the amount of money you are owed. If you are owed between $0.00 and $150,000.00 you will commence proceedings in the Magistrates Court. If you are owed between $150,000.00 and $750,000.00 you will commence proceedings in the District Court and if you are owed over $750,000.00 you will commence proceedings in the Supreme Court.
The alternative to the above course of action, exists only if a company owes you money, is instead of issuing a letter of demand and/or commencing proceedings you can issue what is known as the Creditor’s Statutory Demand to a company. A Creditor’s Statutory Demand has to be in the correct form as prescribed by the Corporations Act 2001 (Cth).
Once a Creditor’s Statutory Demand is issued if a period of 21 days expires from the date that the Creditor’s Statutory Demand is issued, and payment is not made in this time and/or an application is not made to set aside the Creditor’s Statutory Demand, then the company that the Creditor’s Statutory Demand is issued to is deemed to have committed an act of insolvency.
You can then apply to the Supreme Court of Queensland to place that company into liquidation.
Companies will typically, do everything in their power to make payment if it is a possibility that their company will be placed into liquidation. This is due to the fact that once a company is placed into liquidation a liquidator will have control over the entirety of the company’s assets.
Similarly if you have commenced proceedings against an individual as outlined above and you obtain a judgment against that individual which states that the individual owes you an amount of $5,000.00 or more you can issue a bankruptcy notice to the individual. The bankruptcy notice is issued by the Australian Financial Security Authority.
Once an individual receives a bankruptcy notice that individual has a period of 21 days to either pay or make application to set aside the bankruptcy notice. If the individual does not attend to this that individual is deemed to have committed an act of bankruptcy.
Proceedings can then be commenced in the Federal Circuit Court to place that individual into bankruptcy.
Individuals will typically do everything in their power to make payment if it is a possibility that they will be placed into bankruptcy. This is due to the fact that once you are placed into bankruptcy a trustee in bankruptcy has control over the entirety of your assets.
If you have any questions regarding anything above, please don’t hesitate to contact me.