Debt Recovery

In Australia, the statute of limitation for a simple contract debt is six years. The only exception is the Northern Territory where the statute of limitation is three years. The statute of limitations is not a time limit for collecting the debts, it is instead a deadline for filing claims with the court.

Debtors are individuals, countries or organisations that owe money.

Letters of demand are utilised to make final demands of a debtor to make payment and avoiding any formal legal proceedings. Well prepared letters of demand can assist in the recovery of outstanding money and in certain instances avoid the commencement of court proceedings.

The Queensland Civil and Administrative Tribunal (QCAT) is able to determine minor debt disputes, valued up to and including $25,000. Examples of the types of debt disputes within QCAT’s jurisdiction include:

- Money lent and not repaid;
- Dishonoured cheques;
- Unpaid invoices or accounts; and
- Work done and / or goods supplied.

The structure of the civil court system in Queensland operates such that debt recovery matters will generally be allocated to a particular court depending on the monetary value of the dept in question. You should seek legal advice regarding the enforcement of relevant court orders to recover the debt owed.

There are multiple circumstances that will determine how long it will take to collect a debt. These include:

- The debtor’s cash flow and financial position;
- The debtor’s willingness to pay their debts;
- The complexity of the debt dispute;
-The quality of your credit documentation; and
- Any existence of Personal Guarantees.

Utilising a debt collection agency will reduce the time it takes to recover the debt and reduce the chance of a bad debt arising.