Debt collection in Australia

Our local debt collection agency located in Australia who will directly initiate collection actions on the spot:

We are pleased to introduce Upper Class Collections Pty Ltd as our debt collection partner in Australia. They will immediately start collection actions in Australia when you start a case.

The debt collection process in Australia

• Introduction.
• Out-of-court debt collection in Australia
• The legal system in Australia.
• The court system in Australia.
• Which court should you go to with your unpaid claim?
• Limitation period.

Introduction:

After an invoice is due and perhaps some reminders have been sent, a debt usually becomes subject to debt collection in Australia in the out-of-court phase. This is when a debt collector tries to get an Australian debtor to pay the debt, without having to take the matter to court.

If the debt is not paid at this stage, it may be necessary to take the case to court. The aim is to obtain a judgment that demonstrates that there is a legal obligation to pay.

If you have got as far as obtaining a judgment in your favor, then a debtor will usually pay. But sometimes you may also need to apply for enforcement to get the state to help you forcibly transfer assets from the debtor.

The out-of-court debt recovery phase in Australia.

When a debt collection agency is faced with the task of collecting an unpaid invoice from an Australian debtor, the process almost always starts out of court. By escalating the matter to debt collection, a debtor usually realizes the seriousness of the situation. But the big advantage is that debt collection agencies, through years of experience and specialization, have become very good at getting debtors to pay. This can be done by contacting the debtor verbally (telephone), in writing (letter, social media, etc.) or even by meeting the debtor in question.

“Threat” of legal action: What debt collectors in Australia also have up their sleeve is that they can “threaten” the debtor that they will take legal action if they do not pay their debt. This is something that greatly affects a debtor’s willingness to pay. Unwanted litigation involves extra costs and a lot of extra time spent. A threat of legal action is something you can only do (under Australian law) if there is a real possibility that you will undertake it. I.e. you have the expertise, jurisdiction etc to carry it out. A debt collector based in another country cannot therefore make threats of legal action.

Rules for the execution of debt collection actions: There are rules and laws that a debt collector must follow in Australia in its operations, particularly when it comes to how it treats a debtor. For example, how personal data is handled or what time of day/week the debtor is contacted. By choosing a reputable debt collection company, you can be confident that the process is done correctly and that the customer relationship is maintained in the best possible way.

Permits and licenses to carry out debt collection activities in Australia: Finally, it should be mentioned that in Australia a license is required to operate a debt collection business. Failure to comply with the rules could, in the worst case, lead to the withdrawal of these licenses for debt collection agencies. Licensing requirements are regulated locally in Australia’s states and territories.

The legal system in Australia

Australia is governed as a federal system of government which was established by the Australian Constitution of 1901.

Power and authority in Australia is divided between:

1. The national government (“the commmonwealth”) and
2. The six states. New South Wales, Queensland, South Australia, Tasmania, Victoria and Western Australia. (In addition, there are three self-governing territories – the Australian Capital Territory, the Northern Territory and Norfolk Island.)

The legal system is a common law system inherited from the former colonial power of England. The main sources of Australian law are:

– Statutory Law and

– Common Law.

Statutory Law: is law passed by Parliament. It can be a federal law made by the federal parliament or a state law made by a parliament in a state or territory. There is an allocation of legislative power between the federal and the state parliaments, depending on the nature of the issue. For example, the federal parliament has the power or jurisdiction to make laws on matters such as taxation, defence, interstate and international trade, while the states and territories have jurisdiction over matters such as health, education and transport. For practical reasons, the federal courts have granted the states and territories jurisdiction over most federal laws. The federal courts retain jurisdiction over bankruptcy, taxation, industrial relations, marriage and divorce, and constitutional law. The state and territory court systems also have jurisdiction over their own laws.

Common Law: This is the “law” that develops in the courts through precedents (judicial decisions of particular interpretative significance). This means that in some cases courts must follow how higher courts have previously interpreted a particular legal issue.

If statutory law and common law come into conflict? If a new law is passed by Parliament that conflicts with the common law, the new statutory law applies. Judges are also not allowed to rule against Statutory Law to create new precedents; however, they do have the power to interpret Statutory Law, and these interpretations can become precedents.

The court system in Australia

At the top of the Australian court hierarchy is the High Court of Australia, which is the highest court for both federal and state law. It has appellate jurisdiction over all other courts. And for certain specific legal cases, it is the court that hears the case from the outset.

Under “The High Court of Australia” there are two branches. These are the federal courts and the state/territorial courts.

Federal Courts:

– the Federal Court of Australia and

– the Federal Circuit and

– the Family Court of Australia.

These courts deal with cases of a specific nature. Mainly cases in which the whole of Australia has an interest. These may include matters relating to business, commercial practice, industrial relations, bankruptcy, customs and immigration.

Courts in the states and territories:

Each state and territory has its own hierarchy of courts, but most have the following hierarchy:

The Supreme Court is the highest state court. It hears large civil cases and serious criminal cases.

The District Court (or County Court) hears civil disputes for slightly smaller amounts and less serious criminal cases than those heard by the Supreme Court. In addition, these courts hear all appeals from the Local Court.

Local Court (or Magistrates Court) deals with small claims and summary offences.

So where should you go with your unpaid claim if you need to go to court?

The vast majority of such cases will be dealt with in the state courts. As we see above, it then depends on the amount in dispute.

What is the statute of limitations for taking your case to court?

Each state/territory determines its own statute of limitations for recovery actions.

For example, in the case of defaulted contracts (which comprise the majority of debts referred for recovery), the limitation period is normally six years.

In some jurisdictions, the limitation period is restarted by a payment or acknowledgement of the debt, even after the original period has expired.

This is how our debt collection service works.