Debt Recovery Lawyer Melbourne

Unpaid debts drain cash flow and consume management time. Whether you are owed money by an individual or a company, CMH Lawyers provides a structured, cost effective approach to recovering what is owed to you. We act for creditors across Melbourne and the Mornington Peninsula at every stage, from the initial demand through to judgment enforcement.

Letters of Demand

A letter of demand is usually the first formal step in the recovery process. It sets out the amount owed, the basis of the debt, and a deadline for payment, typically 14 or 21 days. A letter from a lawyer makes clear that you are prepared to take legal action if the debt is not paid, and in many cases that is enough to prompt payment without the need for court proceedings.

We draft letters of demand that are firm, accurate and legally sound. Each letter identifies the relevant contractual or statutory basis for the debt and puts the debtor on notice of the consequences of non payment, including liability for interest and legal costs.

Statutory Demands

Where the debtor is a company and the debt is at least the statutory minimum, a creditor may serve a statutory demand under section 459E of the Corporations Act 2001 (Cth). If the company fails to pay the debt, reach an agreement with the creditor, or apply to set aside the demand within 21 days, the company is presumed to be insolvent. This presumption can form the basis of a winding up application in the Federal Court.

A statutory demand is a powerful tool, but it must be drafted and served correctly. Procedural defects can result in the demand being set aside, which delays recovery and may expose the creditor to a costs order. We ensure that statutory demands comply with the formal requirements of the Corporations Act and the relevant court rules.

Court Proceedings for Debt Recovery

If a debtor does not respond to a letter of demand or a statutory demand, we commence court proceedings to obtain a judgment for the outstanding amount. The appropriate court depends on the value of the claim. Claims up to $100,000 are generally commenced in the Magistrates' Court of Victoria, claims between $100,000 and $750,000 in the County Court, and claims above $750,000 in the Supreme Court of Victoria.

In straightforward debt claims where liability is not genuinely disputed, we seek default judgment or summary judgment to obtain a result as quickly and cost effectively as possible. Where the debtor raises a defence, we manage the litigation through to trial. Throughout the process, we provide clear advice on costs and the likelihood of recovery so you can make informed commercial decisions.

Judgment Enforcement

Obtaining a court judgment is only valuable if the debt can be collected. We pursue a range of enforcement mechanisms available under Victorian law, including garnishee orders (which direct a third party such as a bank or employer to pay funds to the creditor), warrants to seize and sell the debtor's property, instalment orders, and examination summonses requiring the debtor to attend court and disclose their financial position.

Enforcement strategy matters. We assess the debtor's financial position and choose the enforcement mechanism most likely to result in actual payment. For businesses that regularly extend credit, we also advise on terms of trade and credit management to reduce the volume of debts that reach the recovery stage in the first place.

Frequently Asked Questions

How does debt recovery work in Victoria?

Debt recovery typically starts with a letter of demand, followed by court proceedings if the debtor does not pay. If the court enters judgment in your favour, the debt can be enforced through mechanisms such as garnishee orders, warrants to seize property, or instalment orders. We handle every stage of the process.

What is a letter of demand?

A letter of demand is a formal written notice requiring the debtor to pay an outstanding amount within a specified timeframe, usually 14 or 21 days. A letter from a lawyer demonstrates that you are prepared to take legal action if the debt is not paid.

What is a statutory demand?

A statutory demand is a formal notice served on a company under section 459E of the Corporations Act 2001 (Cth) requiring it to pay a debt of at least the statutory minimum. If the company fails to pay or set aside the demand within 21 days, it is presumed to be insolvent, which can form the basis of a winding up application.

What can I do if a debtor ignores a court judgment?

Several enforcement mechanisms are available, including garnishee orders, warrants to seize property, instalment orders, and examination summonses requiring the debtor to disclose their financial position. We advise on the most effective enforcement strategy for your situation.

How long does debt recovery take?

Timeframes vary. Many debts are resolved within weeks after a letter of demand. Contested court proceedings can take several months. We provide realistic estimates at each stage so you can make informed decisions about how to proceed.