Commercial Law

Debt Recovery

Cash-flow issues can be critical to the survival of your business. The legal system provides for various mechanisms to recover monies owed to you and the course of action you should take depends entirely upon the individual circumstances surrounding your case. When dealing with a debtor company, always obtain director’s guarantees beforehand. Pre-contract searches against individuals for their credit history is also highly recommended in circumstances where you are about to supply new goods/services.

The Magistrates’ Court has jurisdiction to hear civil claims for monies of up to $100,000. It is always advisable to send a written letter of demand before commencing action, however if litigation becomes unavoidable, you must file a “Complaint” which sets out your claim for the debt against the person/company who owes you money. The complaint must then be served personally upon the debtor who then has 21 days to file a defence. If he/she fails to do so, then the Court can make an order against you which is referred to as a “judgment in Default of Defence”. Once you obtain a judgement against a debtor, the next step is to enforce the judgment by having the Sheriff seize and sell property, garnishing the debtor’s wages, applying for bankruptcy against the debtor or in cases of a debtor company, serving a Creditor’s Statutory Demand for Payment and wind up action.