How does the Australian legal system deal with debt recovery?
The structure of legal proceedings in the debt recovery process. Is very similar to how it operates in every other jurisdiction. Before Suing, a creditor would normally send a letter of demand and if this does not work issue a statement of claim and file it in the court with the appropriate jurisdiction. There would be a short period in which the claim would need to be served and then the creditor could proceed to default judgement if the claim was not defended. Once a default judgement is in place, the creditor can pursue enforcement proceeding which may involve garnishes of wages or repossession of the property of the defendant. If however, there is not sufficient assets held by the defendant to satisfy the total amount of the debt, the creditor may choose to proceed to bankruptcy proceedings. This would eventually discharge the defendant of their debts but it would also mean that their financial affairs would be placed under the control of a bankruptcy trustee.
