Debts, in themselves, are difficult to collect on—a fact everyone generally recognises. However, collecting on small debts, in particular, seems to be more difficult, somehow. It is true that bigger debts tend to carry heavier accountability for debtors. These debts are covered by the jurisdiction of higher courts, which tends to instil fear and urge payment on the part of some debtors. Without the gravity that comes with bigger debts, claims for smaller debts then become prone to being taken for granted.
Financial gurus repeatedly refer to a debtor’s willingness as the one thing that ultimately gets him out of debt. But this is exactly what the problem is when dealing with small claims. Debtors readily find the “small” amount of the debt insignificant, and therefore easy to disregard. Considerate lenders can be patient, but there comes a time when you’ve got to say, “Enough is enough”. These small debts, once accumulated, can eventually hurt you.
When do you need the Small Claims Tribunal?
It’s comforting to know that there’s an overseeing entity that you can go to when troubled with collecting small debts: The Small Claims Tribunal. However, the laws can be limited and might not be applicable to your case. Here’s what the Tribunal’s coverage is:
- The debt should be less than $10,000.
It is also important to note that the value can be raised to $20,000, provided that both parties consent via a signed Memorandum of Consent.
- The cause of action existed less than a year ago.
This is a very good reason why collecting on debts should not be prolonged. It might be too late for you to seek the law’s protection.
- It should involve damage to property (excluding motor vehicles).
- It should arise from a contract for the sale of goods or the provision of services.
Despite the limitations, where most provisions might not even cover your needs, this is still very good news. Remember all those money-slashing events due to consumer disputes? One might have thought, “Oh, well! Charge it to experience.” But consumerism in goods or in services, provided that there’s a contract, is addressed by the Tribunal.
- It should arise from a lease for residential premises which does not exceed 2 years.
A residence is a good avenue for building friendly relationships between neighbours and even with landlords. However, it does happen that troubled tenants escape in the dead of night due to an inability to pay rent. Keeping a leasing contract can be a failsafe for the lessor.
- It should be a debt that does not arise from a hire purchase agreement, friendly loans, loans from unregistered moneylenders, insurance claims, employment matters, and rentals or charters.
Winning Isn’t Everything
Winning a case in the Small Claims Tribunals does not guarantee success, yet. There’s still a series of steps that will happen afterward.
- Initially, a Work Order is granted by the Tribunal. This demands the debtor to pay the lender the owed amount in full or in instalment within a specified period of time.
- If the debtor fails or simply refuses to comply, the lender may apply to the Tribunal to substitute the Work Order with an Order to Pay Money for enforcement purposes.
- If there’s a failure of enforcement, the lender can resort to court orders requiring the aid of lawyers.
A number of legal enforcement proceedings can arise from these steps, each of which is more complex than they may appear. Achieving each of these steps, particularly the third, involves so much time, effort and money.
Here’s how Debt Collection Guru can simplify your Small Claims
The above-mentioned process of enforcing small claims is only a provisional guide for individuals who seek to understand the process. However, the State Court advises lenders to seek the right agencies able to assess your case in detail, and offer advice as to the best course of action to take.
Legal advice is helpful. However, the implementation of a court order to either take a debtor’s possessions or sell a debtor’s property is only secondary to locating the debtor. Fake addresses and AWOL debtors are realities lenders often have to face. Even migration rulings can excuse a debtor from the requirements of the law. Legal firms can be limited when dealing with these realities.
Undergoing the process on your own, and even seeking legal advice when the need arises, can be more expensive, time-consuming, and more taxing for you in the long run. And the worst of it is, you might still end up with nothing.
Choosing DCG in the early stages of your debt dilemma can be the wisest thing you could do. Our professional legal team with their expertise in debt collection will simplify all your debt collection dilemmas.
Let us help you! Contact us now.