If you run a business, chances are you've dealt with a client who simply won't pay — so when does chasing the debt yourself stop making sense?
If you run a business, chances are you've dealt with a client who simply won't pay. You've sent the invoice. You've sent reminders. You may have even had a conversation about it. And still — nothing.
When to escalate
As a general rule, it's time to involve a lawyer when: the debt is significant enough that losing it would genuinely hurt your business; you've made repeated attempts to recover the money without success; the debtor is disputing the debt without reasonable grounds; you're concerned the debtor may be heading toward insolvency; or the limitation period for the debt is approaching (generally six years in Queensland).
What a lawyer can do that a letter of demand can't
A letter of demand from a lawyer carries significantly more weight than one from a business owner. It signals that you're serious and that legal action is imminent. Many debtors pay promptly once they receive one.
If payment still isn't forthcoming, a lawyer can pursue the matter through the Queensland Civil and Administrative Tribunal (QCAT) for smaller debts, or through the District or Supreme Court for larger amounts. Once judgment is obtained, enforcement options include garnishing wages or bank accounts, or registering a charge over property.
Don't wait too long
The longer you wait, the harder debt recovery becomes. Debtors can become harder to locate, assets can be moved, and businesses can be wound up. Early action is almost always more effective.
At Beckett Lawyers, we handle debt recovery efficiently and cost-effectively — because we understand that the goal is to get your money back, not to run up a legal bill chasing it. Contact us at mike@beckettlawyers.au or book a consultation at beckettlawyers.au.