Top-Rated Debt Collection Agency in Australia
Fast and reliable debt collection in Australia - no upfront costs, only pay for success. Request a FREE Consultation or upload your claim today.
Recovering your debt in Australia is easily achieved through this method.
Debitura specializes in debt recovery services in Australia. We offer a complete suite of services, such as accounts receivables management, debt collection notices, pre-legal and legal debt collection, and enforcement court proceedings. Our knowledgeable staff has extensive expertise in Australian debt collection laws and regulations, which enables us to deliver prompt and practical solutions that assist organizations in recovering unpaid debts.
We provide unwavering assistance throughout the debt collection process.
Tailored debt recovery approach.
We have a team of over 500 specialists dedicated to global debt collection.
Our debt collection services boast a remarkable success rate of 87% while keeping costs at a minimum.
UCC is an international Australian company which started operations in 2006. We have since grown to include most of ASEAN. We use advanced IT systems and abide by the EU GDPR and Australian and Singapore privacy laws. We are members of the TCM Group and IACC.
The ultimate guide about debt collection in Australia
Are you looking to get the finances that your business or customer owes you from within Australia? Look no further! Our team has been at the forefront of assisting numerous businesses reclaim debt in Australia for years. Countless others have benefitted from our expertise — why not join them and reclaim what’s yours?
Recovering a debt in Australia can appear insurmountable, with language and cultural discrepancies, foreign regulations and customs, as well as the sheer physical distance posing immense obstacles.
Simplifying debt recovery is achievable with the help of a collection agency who are familiar with the laws and practices in the country where your debtor lives.
At Debitura, we prioritize people over anything else. We take every measure necessary to retrieve your money while at the same time preserving a positive rapport with your customer base. Our strategic public relations techniques are both reasonable and persuasive-ensuring that safeguarding your image is our foremost priority!
If you are looking to improve your understanding of the Australian debt collection process, then look no further than this guide. We provide a comprehensive overview from A to Z for those who want to pursue self-collection in Australia. On the other hand, if working with an experienced local law firm specialising in debt recovery is more up your alley - we can help!
Debitura simplifies the process of debt collection in Australia and over 200 countries worldwide. Begin now by uploading your claim, and within 24 hours you'll receive three complimentary quotes from local Australian debt recovery attorneys - it's that easy! Get started today with Debitura. Our innovative people-centric approach blended with the most advanced tech solutions guarantees great outcomes while keeping customer loyalty intact. This comprehensive strategy ensures efficient contact management that will help you achieve your desired results. Moreover, we have formed a strong web of collectors, attorneys, vendors and suppliers whose relationships with us are highly valued. It is these essential partnerships that enable us to achieve success no matter the size of the organization.
Collect your debt in Australia for free by creating a free profile and uploading your case within just 2 minutes. Start today!
Our pre-legal recovery process is a proven method to collect your claim. We offer a no-cure-no-pay policy for the first 3 months.
If your claim remains unpaid during the pre-legal phase, we offer you 3 quotes from our local debt collection lawyers.
You get access to our online portal where you can track your case in real-time
Introduction to collecting debt in Australia
Struggling to recoup your Australian debts? Stress no more! We make retrieving payments from Aussie customers simple and straightforward.
During debt collection proceedings in Australia, the individual who is owed money is termed "the debtor", while the person or entity that has issued the invoice is known as "the creditor".
When the original creditor collects a debt directly, this is referred to as “first-party collection”.
If the creditor turns over their debt collection to a third-party agency, it is then referred to as "third-party collections".
- Domestic companies exhibit exemplary payment behavior compared to their international counterparts.
- Navigating the court system in this country can be complicated due to its federal structure, with limited expedited procedures for straightforward claims. Although courts are efficient most of the time, delays and expenses may still result in significant consequences while enforcing foreign judgments might turn out to be a challenge.
- Navigating bankruptcy proceedings can be difficult and costly, especially when the prospect of full recovery is slim in liquidation.
Days Sales Outstanding (DSO)
Contrary to many other countries, domestic businesses in Australia have exhibited a pattern of reliable payment habits - payments through the country typically get made within 30 days on average (calculated from when goods are delivered or services supplied). Not only that, but listed companies' DSO has remained steady over recent years.
Common payment types in Australia
Listed below are the most popular payment methods:
In Australia, the majority of transactions are done on open account - goods are delivered and shipped before payment. Electronic funds transfer (EFT) as well as swift bank transfers remain popular among users due to their speed, security features and growing international banking network.
Cheques are used less frequently in Australia, except by single proprietorships. Typically, it is relatively easy to procure a bank guarantee although the cost could be high contingent on who issues it.
Corporate Structures: An Overview
The liability for business debts hinges upon the legal structures established, which can be summarized as follows:
- When a small business is looking for an entity type, Proprietorship (“Sole Trader”) is often the ideal option. Not only does it rely on the skills of its sole proprietor who owns all assets associated with the venture, but this individual also assumes full responsibility and liability for any activities or debts that arise.
- Partnerships are a great way to conduct business with up to 20 partners. When forming the partnership, each partner should draft an agreement detailing their rights and liabilities as part of this venture. Be aware that unless you choose to set up a Limited Partnership, all partners' liability is joint and without restriction; meaning even if one partner racks up debts from operations unbeknownst to others in the venture, they are still fully responsible for repayment of those obligations.
- Proprietary Limited (“Pty Ltd”) Companies offer a flexible and reliable legal structure that can be established by up to fifty shareholders. There are no minimum capital requirements, and the liability of each shareholder is limited to their investment amount - creating an environment of risk-managed trading. With companies as your business model, you reap the rewards without having to worry about personal financial exposure.
- Companies from overseas could also function in Australia through a Representative Office, which cannot bring in revenue, or by opening a Branch that is authorized to pursue business operations. Generally speaking, these companies are mandated to file yearly balance sheets with the Australian Securities and Investments Commission (ASIC), but some small businesses may qualify for exemptions.
- Trusts are a particular method of organization, with rules set forth in an agreement (deed), and administered by a trustee. This individual or corporate entity holds assets on behalf of the trust's beneficiaries, ensuring any transactions performed serve their interests. Trusts can be intricate structures used to lessen taxation liabilities, plan for succession matters and secure asset protection.
- Two common trust forms are Discretionary Trading Trusts and Unit Trusts. In the former, distributions of profit occur at the discretion of trustees; in the latter, beneficiaries receive fixed distributions based on their units held.
- In contrast to partnerships, Joint Ventures are when two or more entities combine their resources and expertise in order to build a shared project and generate revenue without establishing an independent business entity.
The debt collection process in Australia
The debt collection process in Australia usually happens in more than one step.
The image below explains our standard process for collecting debt in Australia:
1 Upload your claim:
If you want help to get your money back, you need to find a debt collection partner. This is a person or company who will help you get your money back from someone who owes it to you. Debitura will give you 3 quotes from partners in Oceania for free.
2 Amicable collection:
The collection process typically begins with sending reminders to your debtor via email, SMS, letter and other ways. The goal is to get the debtor to pay or acknowledge the debt and start a payment plan. With Debitura, you only pay a small success fee if we recover your debt. Amicable collections are, therefore 100% risk-free!
If you have not received payment from the debtor after trying to work it out, it is time to look at other options. We will look at the size of your claim, the chances of getting paid and other factors to help you decide what do next. There are three typical next steps:
If you are owed less than 2,000-5,000 Euros, it is not worth it to take legal action. In this case, we recommend "debt surveillance." This is when we will keep trying to contact the person who owes you money and try to reach an agreement.
B: Legal collections:
It's a good idea to start a special procedure called a legal process if you have a big claim. The steps of the process will change depending on the specific claim and how big it is. Usually, the whole process will take around a year and a half to finish.
Basically, if you want to claim something big, you should start a legal process, which is like a set of steps that you need to follow. These steps change depending on what you are claiming and how big the claim is. And it can take about one and a half years to finish everything.
C: Debt enforcement:
You can ask the bailiff to help you get your money back if the person you lent money to agrees that they owe you the money, or if a judge says they owe you the money.
At Debitura, we can help you with all three steps in Australia.
Amicable collection in Australia
Debitura makes it easy to reclaim what's rightfully yours! Our 100% risk-free and highly effective Amicable collections process guarantees immediate action. Just submit your claim, and we will start the procedure within a day.
To ensure maximum success, we will make contact with your debtor through a variety of channels in Australia, including but not limited to email, text message, regular mail correspondence, telephone calls and social media platforms.
This initiative strives to:
A) acquire the debtor's full payment or
B) have the debtor confirm the debt and initiate a payment plan.
If the debtor has denied your claim, it is not possible to begin with a peaceful resolution. You must move on immediately to legal collections.
Late Payment Interest
Government agencies must pay small businesses within 30 days of receiving an accurate invoice, or a penalty interest may be applied per the Taxation Administration Act 1996. If private business relationships are not specific to regulated industries, it's up to the parties involved to settle any dispute around late payments without government intervention.
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amicable debt collection
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Legal collection in Australia
If your claim is left unpaid during the amicable phase or if the debtor disputes it, we will offer you 3 free quotes from our local debt collection attorneys. During this legal phase, one of our lawyers in Australia will contact your debtor and attempt to negotiate a payment plan. Alternatively, they can take your case to court and obtain a payment order that can be used to enforce said claim through an enforcement court procedure.
If negotiations between the parties do not work out, or if the debtor chooses to challenge the claim, legal action may be pursued. This process is ordinarily lengthy and expensive when defended against; however, it can be worthwhile in certain circumstances. Writing a Demand Letter that outlines any owed principal and interest before proceeding with a court case would likely prove prudent. To initiate legal action, a Statement of Claim must be provided to the debtor who is expected to adhere with the ruling or file an objection within 28 days (grants for extensions may be allowed depending on location). If the debtor fails to comply with these regulations, then it would permit the creditor to seek a default judgment. Differently, judicial proceedings will take place and deadlines shall be set (including inquiry when lawyers are able to interrogate parties involved as well as mediation stage).
When the court issues an order for relief, it could be in the form of compensatory damages, specific performance orders, restrictive injunctions or restitution. Punitive damages are given to plaintiffs in tort cases but are rarely awarded within debt litigation proceedings.
Additionally, when initiating a lawsuit in the court competent to handle cases from the debtor’s place of registration, it is more likely that procedural delays due to lack of jurisdiction issues will be avoided. Furthermore, Class Action proceedings originating out of Australia are becoming increasingly commonplace and popular.
Beginning a lawsuit before the appropriate court in where the debtor resides can be extremely helpful, as it will prevent any potential procedural delays from lack of jurisdiction. Additionally, Class Action proceedings are becoming increasingly popular in Australia and could potentially be beneficial when trying to achieve litigation success.
The Australian court system can be a labyrinth of laws and regulations due to the country being divided into two internal territories, six states with unique legal systems, and countless harmonization initiatives underway. Although there are not tribunals specifically devoted to commercial law matters like in many other countries, certain specialized divisions within existing courts exist (e.g., Small Claims Division of NSW local court or Victorian Civil Administrative Tribunal). Thus, depending on the magnitude of the claim and grounds for litigation, large commercial disputes are usually brought to either the Federal Court of Australia (the FCA can be found in each capital city) or a regional Supreme Court.
As a rule of thumb, Local or Magistrate Courts (depending on the state) are usually able to make decisions for lower-value claims. It's important that international contracts specify where resolutions should be made in order to avoid any jurisdictional dispute issues. If there is no specified jurisdiction, judgments need firstly be executed and enforced within the Supplier's country before enforcing them through Australian superior courts under Foreign Judgements Act 1991.
To get the most cost-effective legal fees, it's essential to look around and compare multiple attorneys. With Debitura, you can quickly do this with just a few clicks! When pricing out your claim size and complexity, using Debitura will help ensure that you're getting the best value for your money.
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legal debt collection
Upload your claim and get 3 FREE quotes from our local collection partners.
Debt enforcement in Australia
To enforce your claim in Australia, you can use the bailiff's court if you possess either a written confirmation of your claim from the debtor or an applicable court order.
Once a judgment has been issued and all appeals have expired, it can be enforced by the creditor. The debtor must act within 12 years to enforce a local judgment via Examination Notices, Garnishee Orders or Writs of Execution.
Obtaining a Court Order for Examination is an invaluable asset to the recovery process, as this allows us to gain insight into the debtor's financial portfolio and assets. After judgment has been entered against them in court, we must request such an order from a judge. Once completed successfully, it can help us determine the best way forward with our collection strategy.
A Garnishee Order can be issued by the court, which grants the creditor authority to recover debt from both the debtor's bank account (or salary) and their own debtors until all principal and interest fees are paid in full. In reality however, it is generally more effective when used after a thorough Examination Order of company accounts has been conducted in court.
Ultimately, the court can issue a Writ of Execution for the Levy of Property in order to require the sheriff to confiscate and sell off debtors' assets towards satisfying their creditor. The sheriff's costs include fixed fees (less than AUD 100 or EUR 64 equivalent) as well as a percentage on any collected sales proceeds. Generally speaking, due to such intervention by law enforcement personnel debtors are more likely to come together with an arrangement regarding instalment payments instead - though they may be able opt-out entirely by submitting paperwork challenging/contesting legal decisions made against them; if this route is taken then all related expenses will simply be added onto what already needs paid back anyway.
Debtors can also be forced to pay their debts through insolvency procedures. A judgment certificate may be linked with a Creditors Statutory Demand or bankruptcy note, demanding the debtor to either pay off their debt in full, or make arrangements to gradually repay it within 21 days of receipt. If they fail to meet this requirement, there will then be strong evidence that they are bankrupt and proceedings for liquidation or bankruptcy could begin.
Debitura will provide you with 3 tailored quotes based on your individual case, along with details of the process and associated cost within 24 hours after uploading your claim. Take advantage of this opportunity to get exactly what you're looking for fast!
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Upload your claim and get 3 FREE quotes from our local collection partners.
Insolvency proceedings in Australia
If it becomes evident that the debtor is unable to settle their debts, the last resort you can pursue is a bankruptcy process. This method aims to liquidate all of the debtor's assets and divide them among creditors in accordance with debt seniority.
- Informal out-of-court settlements may be concluded by a debtor with all creditors, but creditors would need to agree and execute a deed so that a single creditor could not overturn such an arrangement.
- A court-sanctioned Scheme of Arrangement between creditors and the company may also be reached, which becomes effective once a required majority of creditors has approved the scheme and the court has validated the agreement.
- The process is designed to allow companies to restructure their debts, during which directors remain in control of the business and are able to continue trading while creditors can’t initiate legal action.
- An eligible company will be 'under restructuring' while its restructuring plan is being developed in consultation with Small Business Restructuring Practitioners (SBRP).
- Administration Voluntary Administration is the most common procedure as it aims to maximize a company’s chances to continue its activities, suspending director’s control in favour of registered administrator appointed by company itself.
- Creditors and other parties are generally prevented from enforcing their rights during moratorium phase, but it is very common for commercial contracts to allow termination if other party undergoes insolvency procedures.
The analysis is concluding that the risk of doing business in Australia is low. Based on this low score, You can feel reasonably confident that you will be able to get paid when trading with customers in Australia. Nonetheless, we always recommend doing a specific credit analysis on an individual customer basis before offering any credit. The low risk score is based on the following factors:
The economic risk in Australia
Our analysis shows that the economic risk in Australia is very low (1 out of 6). An economic risk of 1 out of 6 is low in Oceanic.
GDP and economic growth are critical drivers for economic risk.
The GDP of Australia is 1542.66 bn. USD (2021), growing by 1.48% per year.
In terms of the size of its economy, Australia ranks #14 out of 183 countries and has a large economy.
In terms of growth rate, it is ranked #152 out of 183 countries and is therefore considered a slow-growing economy.
GDP per capita is 59934 USD, ranking Australia number #12 out of 183 countries. This means the purchasing power of citizens in Australia is high compared to the rest of the world.
You get a more detailed idea of GDP and economic growth in Australia in the table below:
Another significant influencer for the economic risk score is the inflation rate and the interest rates. You get a more detailed idea of monetary KPIs in Australia in the table below:
The inflation in Australia was 2.9% in 2021 which is considered a low inflation rate.
The business environment risk in Australia
Our analysis shows that the business environment risk in Australia is very low (1 out of 6), which is a low risk score in Oceanic.
Economic freedom and rights has a big influence on the business environment risk in a country. You can see the critical facts for Australia in the table below:
As you can see in the table, the property rights index is 82 in Australia, which is considered quite good in Oceanic.
The business freedom index is based on 10 indicators, using data from the World Bank’s Doing Business study. The Index is 87 in Australia, a good score for a country in Oceanic.
Australia's overall economic freedom index is 82 out of 100 and is based on factors such as the rule of law, regulatory efficiency, and market openness.
The political risk in Australia
The political risk in Australia is very low, with a score of 1/6. This is a low political risk score in Oceanic.
The governance and political stability indicators are critical drivers for political risk. An overview of Australia can be seen in the table below:
The rule of law index analyses to which extent agents have confidence in and abide by the rules of society, in particular the quality of contract enforcement, property rights, the quality of the courts, and the police's ability to enforce court orders.
When transacting business in a country, the rule of law index is critical as it describes your ability to enforce commercial contracts.
In Australia, the rule of law index is at 1.67 points, with the score going from -2.5 (weak) to 2.5 (strong). Australia has, therefore, a very high rule of law index, which means you have a very good chance of enforcing your contracts. If your individual customers have good creditworthiness, you should therefore feel relatively safe when providing credit.
Other drivers for the very low political risks are the strong control of corruption, the average political stability index, and the small shadow economy that is 8.1% of Australia's GDP.
The commercial risk in Australia
In Australia, the commercial risk score is 1/4, which in our model is a very low score. This very low commercial risk score is low compared to the average in Oceanic.
The commercial risk is relying on a country's international trade relationships. You can see some of the key facts for Australia in the table below:
Australia has a foreign exchange reserve of 57.88 bn. USD.
Australia has a positive trade balance of 4.35% of GDP. The implications of this is that Australia imports fewer goods and services than the country exports.
The annual growth of exports of goods and services has been growing -8.39% annually - now 22.18% of GDP. Import of goods and services represents 17.83% of the GDP in Australia.
The financing risk in Australia
We have calculated the financing risk to be 1/4, which equals a very low risk. A very low financing risk score is low for countries in Oceanic.
The country's banking system, efficiency, and stability influence the financing risk. Additional facts and info can be found for Australia in the table below:
In Australia, the credit information sharing index is 8 on a scale from 0 (low) to 8 (high). The result of this, is that the access and trustworthiness of the credit information in Australia is high.
This makes it easy for you to understand the credit risk of your counterpart in Australia. You would be able to find a good local credit rating agency that can help you analyse the creditworthiness of your specific customers.
Your legal rights as a creditor (and as a borrower) are 11 out of 12 and, therefore, very strong.
Debt Collection in Australia: Frequently Asked Questions (FAQ)
In Australia, debt collection can occur through "first-party collection" (when the original creditor collects the debt directly) or "third-party collections" (when the creditor turns over debt collection to a third-party agency). The debt collection process typically involves several steps, from sending reminders to debtors to legal action and debt enforcement. Domestic businesses in Australia have reliable payment habits, with payments made within 30 days on average. Debitura offers a risk-free approach to debt collection, with free quotes from partners and a small success fee if a debt is recovered.
The debt collection process in Australia typically involves three steps: pre-legal collection, legal debt collection, and debt enforcement. Pre-legal collection involves sending reminders to the debtor to pay, while legal debt collection involves taking legal action for large claims. Debt enforcement involves getting help from a bailiff to recover the money owed. Debitura can assist with all three steps of the process in Australia, providing free quotes from debt collection partners and a risk-free success fee.
In Australia, legal options for debt collection include negotiations and, if necessary, civil lawsuits. A local lawyer is required and debt enforcement and insolvency proceedings are options. If disputed, a civil lawsuit is required. Insolvency proceedings involve liquidating the debtor's assets and dividing them among creditors in debt seniority. Companies can restructure their debts with the help of Small Business Restructuring Practitioners or registered administrators appointed by the company. It's important to specify jurisdiction in contracts to avoid jurisdictional dispute issues. Compare multiple attorneys to get the best value for your money.
The cost of debt collection in Australia varies depending on your case, but Debitura offers a no-cure-no-pay model for pre-legal collection with a success fee between 10-20%. For legal actions, the price depends on your specific case and desired actions, but we can provide you with 3 quotes from the best debt collection lawyers in Australia.
The length of time it takes to collect a debt in Australia can vary depending on the debtor and the case. If it can be resolved during the pre-legal phase, the process usually takes about 3-6 months. However, if legal action is necessary, collection can take longer, typically around 12-18 months.