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I am owed money, what can I do?!

Written by Catherine Micallef

Edited by Dannielle Wright

We understand that trying to recover monies owed and pursuing unpaid debts can be a time-consuming and overwhelming process. Whether you are owed money by a friend, acquaintance, business partner or supplier, there are several options to consider when it comes to recovery of the funds owed to you. Our dedicated team of debt recovery lawyers recommend the following when reclaiming your outstanding debts:

1. Communication: Start by communicating with the person or entity that owes you money. Make sure they are aware of the debt and try to work out a mutually agreeable payment plan. Sometimes, a simple reminder or negotiation can lead to payment without further action or legal intervention.

2. Letter of Demand: If the debtor fails to make payment after communicating with them, you can send a formal demand letter. The letter should clearly state the amount owed, the reasons for the debt, the date it was due and provide a clear deadline for payment. We recommend that you retain a copy of the letter for your records

3. Debt Collection Agencies: An alternative option is to engage a debt collection agency. They specialise in recovering debts on behalf of individuals or businesses. It is important to note that these services typically charge a fee or take a percentage of the recovered amount

4. Dispute Resolution Services: If the debtor disputes the debt, you may consider alternative dispute resolution services offered by organisations such as the Victorian Small Business Commission (VSBC) or the Dispute Settlement Centre of Victoria (DSCV). These services aim to help parties resolve disputes without making an Application to Court. Consumer Affairs Victoria also provides information and assistance in resolving disputes

5. Mediation: If the debtor is willing to negotiate but you are unable to reach an agreement, you can consider private mediation. Mediation involves a neutral third party who can help facilitate a resolution between both parties

6. Legal Action: If the debt is significant and other methods have been unsuccessful, you may consider taking legal action. It is important that you consult with a lawyer to determine if it is advisable to pursue legal remedies, such as filing a claim in the relevant Court, depending on the amount owed. Your lawyer can guide you through the process and represent your interests. The options for smaller debts are as follows:

Victorian Civil and Administrative Tribunal - VCAT: If the debt remains unpaid after the letter of demand or dispute resolution attempts, you can file a claim with VCAT. You will need to pay a filing fee, provide evidence of the debt, and attend a hearing. VCAT has the authority to make orders for payment and can assist with enforcement if necessary.

Magistrates' Court of Victoria: If the amount owed is up to $100,000 you can pursue a claim in the Magistrates' Court of Victoria. This is a less formal and cost-effective legal process. You'll need to file the appropriate forms and pay the required fees. The debtor will be served with the documentation and have 21 days in which to file a defence. The matter will then be listed before a registrar for a pre-hearing conference.

It is important to note that some debts can only be filed in a specific court so it is important to obtain legal advice before filing.

The information in this article is for general information only. If you require advice on any topics mentioned in this article, please contact our office to speak to one of our experienced solicitors.

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