|
You can also dowload our updated brochure by clicking here. | If you owe someone money, you should do something about it. |
Even if you don't agree how much you owe or don't think you owe the money, you should do something.
This brochure explains some of the legal steps to take if you are in dispute about amounts under $60,000.
Make sure you get legal advice
if you aren't sure what to do. |
| The Centres and Services listed below give free advice. |
LawAccess NSW can help you over the phone. Tel: 1300 888 529 Monday to Friday 9am-5pm or visit www.lawaccess.nsw.gov.au.
Legal Aid provides a free 20 minute interview for credit and debt advice. To make an appointment, ring your nearest Legal Aid office.
If you need further help, Legal Aid may pay a lawyer to represent you if: - the matter in dispute is over $3,000
- the debt is a consumer debt
- you meet our means test and
- your case is likely to succeed.
Chamber Registrars in most Local Courts provide free legal assistance. They can also help you with court
documents. Ring your nearest Local Court to find out when you can see the Chamber Registrar.
Financial Counsellors assist people with debt problems by providing free information and advice on options available and negotiating with creditors. Ring Credit Help Line on 1800 808 488 for information about your nearest financial counsellor.
Community Legal Centres provide free legal advice and information about a range of matters including
credit/debt. For information about where your nearest centre is, call 9318 2355 or visit www.nswclc.org.au/clcs.html.
The Consumer Credit Legal Centre specialises in credit/debt matters. For legal advice,
call (02) 9212 4111 or the Credit and Debt Hotline: 1800 808 488.
Hours: Tuesday 10-12:30pm, Thursday 2-4:30pm
What is a Letter of Demand?
This is a letter from the creditor (the person/company who says you owe money) which demands that you pay a set amount by a date or court proceedings will be started. A letter of demand is not from the court.
When you get a letter of demand, check the amount is correct. If you disagree with what it says you owe, or there are not enough details, write a letter (and date it!) to the creditor asking for a detailed statement of money owed. Keep copies of all your letters.
If you are uncertain what to do, contact one of the services listed on the back of this brochure.
TIP: If you do owe the money but can't afford to pay it all back within the time demanded, try to negotiate with the creditor.
TIP: If you refused to pay for faulty goods or services, you can apply to the Consumer, Trader and Tenancy Tribunal.
Responding to a Letter of Demand - Your options
1. Refuse to pay
2. Don't ignore it, because your creditor can then begin legal proceedings and you will have to pay the legal costs if you lose in court.
3. Negotiate with the creditor if you can't pay the full amount by either: - requesting an extension of time to pay the debt;
- requesting to pay the debt off in instalments;
- offering to pay a reduced amount to finalise the debt;
- requesting that the debt be written off;
4. Pay in full.
Remember, when negotiating with the creditor, work out your budget, so that you only agree to pay the debt if you can afford to. If you have other debts or you find it hard to budget, get help from a financial counsellor.
What is a Statement of Claim?
If you receive a Statement of Claim you must do something- don't ignore it!
This is a document issued by the Local Court. It means the creditor has started legal proceedings to recover money from you. If you receive a Statement of Claim, you have 28 days from the date you received it to make a response to the Local Court.
TIP: Get any of your arrangements with the creditor in writing, keep receipts of any money you have paid as well as copies of letters from you to the creditor.
Responding to a Statement of Claim - Your options
1. If you ignore the Claim, the Court will order that you owe the money to the creditor. This is called a "Judgment Debt" against you. You can reverse this, but you must show you had a good reason for not acting within 28 days.
2. To pay in instalments, fill out a form at the Local Court "confessing" to the debt and applying to pay by instalments. Provide details of your income and assets. If the Court agrees to your application: 3. If you say you don't owe the money you can file a defence. You should get legal advice before doing this because it can cost a lot of money if you lose.
4. If you agree to part of the debt you must still file a defence. You cannot confess just to that part of the debt.
5. If you say the creditor owes you money you can file a cross claim.
If you take any of the above options, you will have to file a form in the Local Court. You must do this within 28 days. The Chamber Registrar at your Local Court can help you do this.
6. Apply for voluntary bankruptcy. You should get advice from a lawyer or a financial counsellor before taking any steps to file for bankruptcy.
The Court Decision
The Local Court can order you to pay the debt, plus the costs of the Statement of Claim service, and lawyers if: - you ignore the Statement of Claim for 28 days and the creditor asks the Court to make a Judgment Debt. You will not be told about this; or
- you "confess"; or
- you defend the Statement of Claim but you lose. The costs of the creditor's lawyers will then be added to the debt and can be very high after a defended hearing.
If the Court makes an order that you must pay a debt, the creditor is called the "judgment creditor" and you are called the "judgment debtor". When the order is made, "judgment" is given against you. This order remains in force for 12 years. This means the judgment creditor has 12 years to take further action to recover money owed by you.
After a Court Order: How the Creditor Can Make You Pay
If you get a judgment made against you, the judgment creditor can do the following:
1. Examination Notice: An Examination Notice requires you to either answer questions about your income and/or provide specified documents about them. If you do not do this, you can be ordered to attend court for examination about your financial circumstances.
2. Garnishee: The judgment creditor can ask the Court to "garnishee" your wages or bank account. This is a court order telling your employer or bank manager to give your money to the judgment creditor and not to you. Any money you receive from the Department of Social Security cannot be taken by the judgment creditor, but if placed in a bank account it is at risk of being taken.
3. Writ of levy of property: This is a court order allowing a Sheriff's Officer to remove items from your home to pay the debt. The Sheriff's Officer may not take or sell:
· your bedroom and kitchen furniture; or
· your tools of trade up to a certain value; or
· goods which are not yours.
The Sheriff's Officer cannot force entry to your home but if denied, may obtain a court order to enter your premises.
4. Bankruptcy: If your debt is over $2000, the creditor can apply to the Federal Court to have you declared bankrupt. If you receive a Bankruptcy Notice you should seek advice from either a financial counsellor or lawyer immediately. TIP:The creditor cannot do any of these things if you have an instalment order in place at the Local Court. See the Chamber Registrar about applying to pay by instalments.
|
