Practice · 10
Debt recovery and security
Getting paid starts with the terms you sold on. Recovery starts with a letter.
For businesses owed money, and for businesses that have received a demand.
The work
Most bad debts were avoidable at the point of sale. A credit application with a director's guarantee, terms of trade that charge interest and keep title in unpaid goods, a registration on the Personal Property Securities Register. None of that is glamorous and all of it decides whether a debt is collectable two years later.
The practice does both ends. It writes the terms and the security that make a business's receivables worth something, and it recovers the debts that go bad: an assessment of whether the debtor can pay, a letter of demand, an instalment deed where one makes sense, a statutory demand against a company, and claims in a tribunal where one has jurisdiction. When a matter needs a court, it is handed to a litigator with the file already in order.
Letters of demand and payment deeds are fixed-fee work. Larger recoveries are quoted stage by stage.
This work includes
- Letters of demand
- Payment plans and instalment deeds
- Terms of trade that get you paid
- Personal guarantees
- Director guarantees and credit applications
- Retention of title and PPSR registrations
- Security over assets
- Creditor's statutory demands
- Tribunal claims for unpaid accounts
- Responding to a demand made against you
How it usually runs
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First, whether it is worth chasing
Who the debtor is, whether they can pay, whether there is a guarantee, and what the contract says. A debt against a company with nothing in it is a different conversation from one backed by a director's guarantee. That assessment comes before any letter.
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The letter, then the deal
A letter of demand from a law practice changes the tone, and most debts that are going to be paid get paid at this stage. Where they cannot pay at once, a signed instalment deed is better than a promise in an email.
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Then the tools that do not need a court
A creditor's statutory demand against a company debtor, a claim in a tribunal where one has jurisdiction, enforcing a guarantee, or taking the security the contract gave you. Court proceedings, where they are the right next step, are handed to a litigator with the file ready.
Where the line is
- Court proceedings to recover a debt, and winding-up applications that follow an unanswered statutory demand, go to a litigator on the panel. Everything before that point, and tribunal claims, stay with the practice.
- The practice does not receive or hold money on a client's behalf. Payments are made directly to you.
Nobody pays anybody for a referral here, in either direction. How the practice hands work on →
Common questions
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Will a letter of demand actually work?
Often, when the debt is clear and the debtor is solvent. A letter from a law practice signals that the next step is real, and it is frequently the first time the debtor has read the contract they signed. It works less well against a company with no assets, which is why the first question is always who you are chasing, not how.
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What is a PPSR registration and do I need one?
If you supply goods on credit, lease equipment, or keep ownership of stock until it is paid for, registering that interest on the Personal Property Securities Register is what makes it enforceable if the customer goes broke. Without the registration, the clause in your terms may count for little against a liquidator. It is inexpensive and routinely missed.
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The debtor is a company. Can I go after the director?
Only if the director gave a personal guarantee, which is why good terms of trade and credit applications include one. Without a guarantee, the debt belongs to the company, and if the company has nothing you have nothing. Check your credit application before you extend credit, not after.
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I have received a letter of demand. What now?
Do not ignore it and do not pay it without reading it. Some demands are entirely right, some overstate the amount, and some are for debts the sender cannot prove. A statutory demand against a company in particular has a strict 21-day clock and serious consequences if it lapses. Send it over and the position gets worked out quickly.
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Make an enquiry
Send a short note about what is happening. You will hear back within one business day, and there is no charge for finding out whether the matter is a fit.