Are you an individual or business that is considering taking debt recovery legal action against another party?
If so, you are probably feeling the weight of the seriousness of this consideration and may be under some pressure to make a decision.
After all, debt recovery legal action is complicated and a lengthy process that you don’t have forever to begin! It is really important for you to take some things into account before beginning legal action as there are a lot of potential issues depending on your financial and otherwise situations.
This is why it is great to have some questions to ask yourself to understand a couple of the basic essentials about how debt recovery legal action would look for you.
In this article, our professional Australian debt collectors will discuss some general questions that you should ask yourself before taking legal action and how these questions can help you to understand more about legal action in your particular matter.
Is Debt Recovery Legal Action Worth It?
The first question that you should be asking yourself when you are considering taking debt recovery legal action against another party is if it will be worth your while to do so.
Legal action can take a lot of time, energy, effort, and money from you.
It can become a main thing in your life for its duration and can simply take a lot out of you and your ability to work, spend time with loved ones, and engage in fun activities.
Although this sounds like an all-around terrible thing, debt recovery legal action can sometimes be a very important and necessary thing that can ensure that you get the justice you deserve.
However, unnecessary legal action will become very tedious very quickly, especially if you don’t really care about the result or it won’t affect you too much if you win.
This is why it is vital for you to get legal advice to assess if it is genuinely worth it for you to take debt recovery legal action against this particular party.
This way, you can avoid the work and resources that legal action takes if it won’t be worth your while.
Do you Have the Resources for Legal Action?
Another key question that you should ask yourself before taking debt recovery legal action is if you have the resources to engage in it.
As much as you may have found that debt collection legal action is a necessary step forward in your matter, you have to make sure that it is an actual viable option for you.
The first resource that you should consider is money.
Legal action is a very expensive task and, once you start it, it is much more difficult to back out than it would have been to simply not do it at all.
Consider if your income provides you with enough money to afford a lawyer as well as any court fees that you may be required to pay.
Not only this but consider if you will still be able to pay bills and pay for other essentials and have enough money left over to enjoy your life a little.
Another important resource that debt collection legal action will take a toll on is your time.
If your job takes up a lot of time already or you have a lot of other responsibilities that render you with practically no time to spare as it is, you may want to take a second to think if legal action is really a viable option for you.
Have you Collected your Evidence?
Another key element of debt recovery legal action that you should make sure you have in your possession before beginning a claim is evidence.
As you are probably aware, evidence is key in any court matter.
We have all seen those cop shows where they are searching desperately for enough evidence to charge a criminal with an offence.
Or may a law show where they are denying that the police have enough evidence to charge their client?
Whatever you’ve seen, evidence is very much centralised in the media around criminal charges. However, evidence is still required in civil matters also!
No matter the nature of your case, you will be required to prove to the court that what you are saying is true in order to receive what you are looking for from the matter.
It is important that you make sure that you have or can access evidence to prove your point in court.
Have You Tried an Alternative to Debt Recovery Legal Action?
Another thing that you should consider before taking debt recovery legal action is if you have considered any alternatives to it beforehand.
As we have already discussed, debt collection legal action can be a very pricey and time-consuming task that can just take a lot out of your personal time.
Using an alternative dispute resolution, or ADR, technique can be a much better fit for you. Several types of ADR can fit you better depending on the details of your particular matter.
For example, mediation is one of the more popular methods. It involves hiring the help of a third party, or a mediator, to oversee a civil and productive conversation that can help the two parties come to a decision that works for both of them.
This is quite a casual alternative and is much less expensive and does not necessarily create a legally binding agreement unless the parties take further action for such to occur.
Debt Recovery Legal Action - What Might You Lose?
Another consideration that you should make before debt recovery legal action is of what you could potentially lose from the ordeal.
Whether it be a good reputation or a lot of money, there is a risk when taking legal action.
However, the reward may be much better than the risk, so it may be necessary.
If there is too much of a chance that you will lose the matter or that you will leave with a damaged reputation regardless, maybe think twice about debt recovery legal action.
Debt Recovery Legal Action Key Takeaways
Debt recovery legal action can be a difficult concept to understand.
Between the several things that could go wrong, it is vital that you properly consider whether or not this would be a good option for you.
If you don’t, you could end up in well over your head without even knowing it.
You should also consider hiring a debt recovery lawyer to provide you with professional advice and keep your rights upheld throughout the process!
BONUS - 6 Tips for Reducing Costs when Pursuing Legal Action
Are you considering pursuing legal action against a debtor?
This can be a mentally draining experience and something you may want to avoid is adding to that stress with costly legal fees.
Remember to take all specifics of your matter into account and avoid budgeting too strictly with your legal fees.
This article will outline proactive ways to cut legal fees while still getting what you need out of your matter!
Pursuing Legal Action - Be Organised
When pursuing legal action against a client, ensure you are adequately organised before speaking with a debt recovery lawyer.
Solicitors will generally charge an hourly rate and an organised system of evidence, questions, and information to present to them will likely decrease the time it takes for them to help you!
If you have large files of evidence or documents that will assist your case, it pays to have them sorted in a neat, labelled fashion that will allow your lawyer to locate appropriate information as needed.
When communicating with them, rather in person, over the phone, or via email, it may be helpful for you to prepare notes of any information you want to inform them of or any questions you have to avoid elongating conversations that may increase costs.
Request a Cost Estimate
As aforementioned, lawyers generally will charge an hourly rate so it may be difficult for them to give you a definitive answer on the price of their service.
Setting this aside, it may be wise for you to ask them for a general estimate on how much their total legal service will cost, once they are aware of the details of course, as they will likely be obligated to inform you of such.
This knowledge can value you in a multitude of ways and may allow you to make an informed decision on how you would like to proceed.
You may have a budget or wish to create one on how much you are willing to invest in this matter and if it will overall be worth your money and efforts to pursue legal action.
You may also wish to find the most cost-efficient lawyer available and having a general estimate on how much each service will cost can assist you in doing just that.
When looking to invest in a legal matter, knowledge is key, and it may be worth your while to find out as much information about your lawyer as possible!
Pursuing Legal Action - Get Advice Early
It is a good idea to seek legal advice early in your matter and will likely save you some costs!
You may think it wise to attempt to collect debts on your own originally and, if all else fails, seek the assistance of a professional.
While a common mistake to make, this is generally not a productive method, unless, of course, you know what you are doing.
When in the early stages of debt recovery, don’t hesitate to seek professional advice whenever you find yourself questioning anything.
Although this may seem costly, it will generally save you significant money as a professional is equipped with all the tools, experience, and legal knowledge required to efficiently collect debts.
You may also make the mistake of violating a law on debt collection due to a simple lack of knowledge of the laws surrounding it, an error that can be avoided by enlisting the help of a pro.
Be Open About your Needs
When initiating communication with a lawyer, ensure you are fully clear with them on what you wish to achieve from their service.
Misunderstanding between yourself and your lawyer can result in your investment in their service being in vain and you ultimately not achieving the results you were seeking from the matter.
Make sure you inform them of all relevant details on the matter including your financial position and what you are willing to invest in the recovery process for the result you are seeking.
Remember to also let them know any relevant information you have on the opposing party, such as their finances and what they owe to you.
Pursuing Legal Action - Try to Settle
Settling is the process of opposing parties coming to an agreement in an attempt to avoid the matter entering a court environment.
Settling may be really beneficial to you as a creditor for various reasons and even a recorded attempt to settle may also be of assistance.
Settling a matter is both a cost and time-efficient method of recovering debts and may ensure an, if slightly compromised, result that appeals to you in some ways.
You may also want to take into consideration if your matter is genuinely worth the costly ordeal of a trial.
Costs aside, if you wish to maintain a business relationship with the opposing party you may want to attempt to settle to show you are willing to compromise and create a healthy relationship between the parties.
Furthermore, if you can make evident to a courtroom that you attempted to settle with your debtor and they refused, the judge may be more likely to consider your case and reward you what you are owed, possibly in full!
Choose a Cost-Effective Lawyer
When searching for a lawyer, avoid settling for the first you find and instead search the market a little!
Some firms will offer a free over-the-phone consultation for a set period, so don’t be afraid to use this to your advantage and receive some advice on your matter.
You may want to find a lawyer that offers the best value of service for an affordable price to get the best value for your money.
Finding the right lawyer for you is an important task, so don’t hesitate to spend a decent amount of time searching for what you’re looking for.
When looking for the right lawyer, you should take into consideration their experience in the field, expertise, reputation, and costs. Remember, it is unwise to simply settle for the most affordable lawyer on the market without considering the above factors first!
Key Takeaways - Pursuing Legal Action
Making that decision to take legal action against a debtor may be a truly stressful experience!
Taking that time to search for a legal representative that works for you can help to ease that stress.
As mentioned at multiple points throughout the article, underinvesting in legal assistance may lead to more money being spent down the line, or even you not receiving what you need out of the service.
As always, consider your needs and the details of your matter and use them to make an informed decision about who you want representing your case!
Debt Recovery Legal Action FAQ
Navigating the complexities of debt recovery legal action can be overwhelming, whether you're an individual or a business.
We understand the gravity of such a decision, which is why we've compiled this FAQ section.
Below, you'll find answers to the most common questions people ask when considering legal action for debt recovery, informed by professional Australian debt collectors.
We hope this helps in guiding you through your decision-making process.
How do I take legal action to recover debt?
To take legal action to recover debt, you will need to:
- Send a letter of demand to the debtor, notifying them of your intention to take legal action.
- If the debtor does not respond to the letter of demand or fails to make payment, you can file a claim in court.
- The court will then issue a summons to the debtor, requiring them to appear in court to answer your claim.
- If the debtor fails to appear in court, you may be awarded a default judgment.
- Once you have a judgment, you can take steps to enforce it, such as garnishing the debtor's wages or seizing their property.
What is a debt recovery action?
A debt recovery action is a legal proceeding that is taken to recover a debt from a debtor. The action can be filed in court or in a tribunal, depending on the amount of the debt and the jurisdiction in which you live.
What is legal debt recovery?
Legal debt recovery is the process of using the law to recover a debt from a debtor. This can involve sending a letter of demand, filing a claim in court, and enforcing a judgment.
Can you ignore debt recovery?
It is not advisable to ignore debt recovery. If you ignore a debt recovery action, the creditor may be able to obtain a judgment against you. This means that they can garnish your wages or seize your property to satisfy the debt.
What is debt recovery legal action?
Debt recovery legal action refers to the process of taking legal steps to recover money owed to you by another individual or business.
How do I know if taking legal action for debt recovery is worth it?
It's essential to consider the time, energy, effort, and money that would be involved. If the outcome doesn't significantly impact you or if you're indifferent about the result, it may not be worth the effort. Consulting with a legal professional can help assess the viability of the action.
What resources will I need for debt recovery legal action?
You will need financial resources to afford a lawyer and any court fees. Additionally, legal actions can be time-consuming, so ensure you have the time to dedicate to the process.
How important is evidence in debt recovery legal action?
Evidence is crucial. To succeed in court, you need to prove your claims. Make sure you have collected and organized all the relevant evidence to support your case.
Are there alternatives to debt recovery legal action?
Yes, alternative dispute resolution (ADR) techniques, like mediation, can offer a less formal, often less costly, way to resolve disputes.
What could I potentially lose from legal action?
Apart from monetary investments, there's a risk of damaging your reputation or losing the case altogether. Weigh the potential rewards against the risks.
What are some tips for reducing costs when pursuing legal action?
- Stay organized to minimize lawyer consultation time.
- Request cost estimates beforehand.
- Seek legal advice early.
- Clearly communicate your needs and desired outcomes.
- Consider settling out of court.
- Choose a cost-effective lawyer.
Why is it beneficial to try and settle out of court?
Settling can be both time and cost-effective. It can also help in preserving business relationships and can strengthen your position if you show the court that you attempted to resolve the matter amicably.
How do I choose the right lawyer for my case?
Look for a lawyer based on their expertise, experience, reputation, and cost. Don't simply go for the cheapest; ensure they offer value and understand your needs.
Can I rely solely on online advice for my debt recovery legal action?
No. Online content is a general overview and cannot cater to the nuances of individual cases. Always consult a professional for your specific situation.
Disclaimer: The content on this article is intended only to provide a general summary of information of interest. It is not intended to be comprehensive nor does it constitute legal advice. We attempt to ensure that the content is current but we do not guarantee its accuracy. You should seek legal or other professional advice before acting or relying on any of the content of this video or on our website. Your use of this video/website or the receipt of any information on this video/website is not intended to create nor does it create a client relationship. As a general rule, never get your legal advice from the Internet.
Advance debt collection is an Australia-wide commercial debt collection agency and credit and accounts receivable management. We can recovery your debts, conduct skip tracing, and manage your accounts receivable. We collect your debts for commission only. This means no collection, no commission. We are professional debt collectors with combined 20 years of experience to help you collect your debts. We are partnered with expert litigation lawyers with years of experience in debt recovery, enforcement, and insolvency. Under the Agents Financial Administration Act 2014 Advance Debt Collection Pty Ltd hold authority number 4583821 to act as a debt collector. ADC Advance Debt Collection® is a registered trademark.