Have you provided goods or services to someone in Tasmania? Is money still owing to you? If yes, you can enforce a payment by issuing a Letter of Demand or through the Minor Civil Claims Division of the Magistrates Court in Tasmania, located in Hobart. This article looks at how you can enforce a payment in Tasmania by issuing a Letter of Demand.

How to Enforce a Payment through a Letter of Demand

Before contemplating issuing a Letter of Demand or recovering your debt through complex and costly litigation, you should send first and second reminder letters. This can also assist in preserving your business relationship. If, however, this is unsuccessful in recovering your debt, you will more than likely send the debtor a Letter of Demand. This will outline the following:

  • Details about the outstanding money owed,
  • The date in which the debtor needs to pay the amount, and
  • What you intend to do if the debtor does not pay the debt by the specified date.

A well-drafted Letter of Demand and the possibility of taking legal action against the debtor can sometimes be sufficient in encouraging them to make payment. A solicitor can help you prepare a Letter of Demand that, importantly, does not harass or intimidate the debtor as this is illegal. If the debtor disputes the debt or ignores the Letter of Demand, you may need to take further action through the Magistrates Court. You should have a copy of the Letter to show the court of your attempt to settle the matter before pursuing legal action.

What Next?

Once you have sent a Letter of Demand, the debtor may respond by: 

  • Admitting the debt and paying the outstanding amount;
  • Negotiating with you for a payment plan;
  • Ignoring the letter; or
  • Disputing the debt’s existence, or the amount owed. 

If the debtor disputes the debt, it is then up to you to consider how you will proceed. You have the option of commencing legal action through the Magistrates Court, or you can write the debt off. You can weigh up the debt amount against the costs of litigation to decide whether it is worth pursuing.  For example, if the debt is $1,500 or less, it may not be worth pursuing this through the court process.

Debt Recovery Action

Which Court hears the debt recovery claim depends on the amount owed.

  • The Minor Civil Claims Division of the Magistrates Court in Tasmania hears claims between $2,000 to $5,000,
  • The General Divison hears claims between $5,001 to $50,000,
  •  The Supreme Court of Tasmania hears claims exceeding $50,000.
  • Conclusion

Should you have any questions about how you can enforce a payment in Tasmania, LegalVision has a team of great litigation and dispute resolution lawyers who can assist you. Please get in touch with us on 1300 544 755. In the meantime, you can keep reading about how you can enforce a payment through the Minor Civil Claims Division in Tasmania’s Magistrates Court.

Dhanu Eliezer
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