DO YOU HAVE A PROBLEM WITH A DEBT?

Maclarens Lawyers can assist you by issuing a letter of demand to a debtor

If someone owes you money Maclarens Lawyers instructed by you can send a debtor a letter of demand. The letter of demand will allege that the debtor owes you money and advise the debtor that if the debt is not paid within a certain period (usually 14 days), you will begin legal action.

Often just receiving a letter of demand is enough to make a debtor pay.

If as a debtor you receive a letter of demand, after obtaining legal advice, if you admit that you owe the debt, you should pay the debt as soon as possible to avoid being charged interest and legal costs.

If you are a debtor and do not owe the alleged debt or cannot pay, you should contact Maclarens Lawyers as soon as possible after receiving a letter of demand so that they can dispute the debt and try to prevent court proceedings from starting.

Even if you do owe the money, Maclarens Lawyers can help you. For instance, we may be able to negotiate with the creditor to come to some arrangement such as paying the debt off by instalments.

If you are debtor, and the claim against you ends up in court and you lose, you may be liable not only for the debt but also for interest and legal costs incurred by the creditor in recovering the money from you. Also, if a judgement is entered against you, it may result in a bad credit report which may mean that it will be exceedingly difficult for you to obtain a loan from a lender in the future.

It is usually in your interest as a debtor to negotiate a settlement with a creditor before the matter proceeds to court.

As a creditor, you commence legal proceedings by filing a Statement of Claim with a court

If you are a debtor and you are served with a Statement of Claim, you should not ignore it.

If you are a debtor and you ignore a Statement of Claim, the creditor can apply to the court for a judgement against you without a hearing.

If you are a debtor, you usually have 28 days after being served with a Statement of Claim to take action. If you do not owe the money, Maclarens Lawyers can defend the claim for you. Maclarens Lawyers can lodge a Defence on your behalf which sets out the reasons for disputing the debt. If necessary, you may also make a counter claim against the creditor, for example, if work done by the creditor was not performed or if the goods you received were defective.

As a debtor, you can admit that you owe the money and apply to the court to pay the debt by instalments. If however the creditor does not agree to the terms you have proposed that the matter will proceed to court. If the matter proceeds to court, the court will fix a day for hearing of the matter.

Maclarens Lawyers can help you prepare the documents which are necessary to prepare a court hearing. The court will give both the creditor and the debtor a chance to have their say and give evidence. If the amount is less than $10,000, you will be required to give your evidence in the form of a written statement. If the amount in dispute is over $10,000, you will also be required to give evidence in the witness box and be cross-examined by the other side. If the court rules in favour of a creditor, the debtor will be required to pay the judgment debt immediately and will often have to pay legal costs as well. However, a debtor can sometimes arrange to pay a judgement debt by instalments.

What happens where a debtor does not pay a debt after a court has ordered the debtor to pay the debt?

If a debtor fails to pay a debt after a court has ordered the debtor to pay the debt, the judgment creditor may:

• Return the matter to court and require the debtor to produce financial records including bank statements and give evidence as to their true financial position on oath. This will help the judgment creditor in deciding what to do next.

• The judgement creditor can issue a Garnishee Order which requires either a bank or employer to remove payments towards your debt from the debtor's bank account or salary.

• The judgment creditor can apply for a Writ of possession which directs the sheriff to attend upon the debtor to seize goods to sell the goods and raise money to pay your debt.

• In certain circumstances, a judgment creditor can apply to declare the debtor bankrupt.

Maclarens Layers can help you if you owe money or if someone owes you

Maclarens Lawyers can advise you on the best course of action for recovering a debt.

Maclarens Lawyers can advise you on how to dispute a debt.

Maclarens Lawyers can negotiate a payment or arrangement on behalf of a debtor.

Maclarens Lawyers can advise a debtor as to whether they have a ground for disputing the debt and or making a counter claim.

Maclarens Lawyers can advise a debtor about applying to pay a debt by instalments.

Maclarens Lawyers can protect your interest if the matter proceeds to court.