Are you owed money that you would like to collect?
Watson Stafford Zipkis can assist you with:
- Preparing a Statement of Claim – used to demand either payment or defence of the matter within 28 days (after the Statement of Claim is served); and with
- Entering Judgement against the debtor (when no action is taken within 28 days).
Once Judgement is entered, a number of procedures are available to enforce it. Watson Stafford Zipkis, our debt recovery lawyers can assist you with Writs (seizure of goods to sell in order to repay the debt), Examination Summons (requiring the debtor to attend Court to display how they will satisfy the Judgement), and Garnishees Orders (whereby the Court can order a third party to pay money to a creditor instead of a debtor).
If these procedures fail to produce a result, and the debtor is a company owing more than $5000, then Watson Stafford Zipkis can assist you with commencing either bankruptcy proceedings (for individuals) or winding up proceedings (for companies).
If an individual is declared bankrupt by the Courts, a Trustee is appointed to take control of the insolvent person’s estate in order to turn the assets into cash to distribute equally among unsecured creditors (those who do not hold security for payment of the debt). Secured creditors may commence debt recovery by disposing of the asset securing the loan (e.g. a bank would do this if mortgage payments are not made on a house). Bankruptcy proceedings are handled in either the Federal Court or the Federal Magistrates Court, depending on the complexity.
When a company is declared bankrupt the Court has the power to ‘wind it up’ and appoint a Liquidator, whose responsibility is to turn the assets into cash and distribute it in the order set out in the Corporations Act. The creditor and the liquidator firstly recover their costs, followed by certain entitlements to employees. The balance is distributed among unsecured creditors.
Winding up proceedings are handled in either the Supreme Court or the Federal Court. Watson Stafford Zipkis can assist you by filing an Originating Process. If the Court is satisfied that the company is trading insolvent, it can then appoint a liquidator.
What Happens if a Liquidator is Not Appointed?
If the company has a solid core business that would allow it to trade viably in the future, the Courts can appoint an Administrator. An administrator is an insolvency practitioner, independent of the company in question. Administrators have the power to call a meeting of creditors to decide whether to put the company into liquidation or to accept the offer of the Directors (allowing the company to trade in its core business to generate cash flow to pay the debt). In this situation, the company and its directors execute a Deed of Company Arrangement, which allows the creditors to take payment in satisfaction of their claims against the company. During this phase, the administrator retains control of the company until debts are paid. Once paid, control of the company is returned to its directors.
Arrange a consultation with an experienced solicitor.