Are you owed money that you would like to collect?
If so, you can take legal action to recover it with JMW Legal. In certain situations, you can also recover your legal costs related to recovery proceedings.
Debts of up to $150,000 can be recovered in the Magistrates Court. Debts over $150,000 (but under $750,000) can be recovered in the District Court whilst debts over $750,000 can be recovered in the Supreme Court.
JMW Legal can assist you with:
Preparing a Statement of Claim – used to demand payment of the matter within 28 days (after the Statement of Claim is served); and with
Entering Judgement against the debtor (when no action is taken by the debtor after 28 days from service).
Once Judgement is entered, a number of procedures are available to enforce it. With JMW Legal, you will be assisted with Warrants of Execution (seizure of goods to sell in order to repay the debt), Examination Summons (requiring the debtor to attend Court to disclose how they will satisfy the Judgement), and Garnishees Orders (whereby the Court can order a third party (eg a bank or employer) to pay money to you instead of a debtor.
If these procedures fail to produce a result, and the debtor owes more than $2000, then JMW Legal can assist you with commencing either bankruptcy proceedings (for individuals) or winding up proceedings (for companies).
If an individual is declared bankrupt by the Courts, a Trustee is appointed to take control of the insolvent person’s estate in order to turn the assets into cash to distribute equally among unsecured creditors (those who do not hold security for payment of the debt). Secured creditors can commence debt recovery by disposing of the asset securing the loan (e.g. a bank would do this if mortgage payments are not made on a house). Bankruptcy proceedings are handled in either the Federal Court or the Federal Circuit Court, depending on the complexity.
When a company is declared insolvent, the Court has the power to ‘wind it up’ and appoint a Liquidator, whose responsibility is to turn the assets into cash and distribute it in the order set out in the Corporations Act. The creditor and the liquidator firstly recover their costs, followed by certain entitlements to employees. The balance is distributed amongst unsecured creditors.
Winding up proceedings are handled in either the Supreme Court or the Federal Court. JMW Legal can assist you by filing an Originating Application. If the Court is satisfied that the company is trading insolvent, it can then appoint a liquidator.
What Happens if a Liquidator is Not Appointed?
If the company has a solid core business that would allow it to trade viably in the future, the Courts can appoint an Administrator. An administrator is an insolvency practitioner, independent of the company in question. Administrators have the power to call a meeting of creditors to decide whether to put the company into liquidation or to accept the offer of the Directors (allowing the company to trade in its core business to generate cash flow to pay the debt). In this situation, the company and its directors execute a Deed of Company Arrangement, which allows the creditors to take payment in satisfaction of their claims against the company. During this phase, the administrator retains control of the company until debts are paid. Once paid, control of the company is returned to its directors.
Personal Property Securities Act 2011 (PPSA)
On 30 January 2012, the PPSA commenced. The legislation governs the way personal property is dealt with and the way in which security over personal property can be protected. The scope of what constitutes a security interest is wide. If you do not protect your existing or future rights in personal property you risk losing your security interest in that property, for example to another creditor or in the event of liquidation, bankruptcy or voluntary administration of your debtor. You can lose title to your property if you leave it in the possession of someone else for longer than 90 days. The PPSR (the register) will record security interests. You can search the register before you purchase personal property worth more than $5000. You can register your interest in personal property in order to obtain priority by preventing a third party from taking ownership of your goods.
Contact JMW Legal for more information or to arrange a consultation.
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