Your Guide to Debt Disputes: What to Do If You Haven't Been Paid
What is a debt dispute?
Debt disputes exist where an individual disagrees with another person, business or company about a specified sum, valued up to and including $25 000.
Debt disputes may be commenced in relation to money owed for:
- an unpaid invoice or account
- IOUs
- unpaid rental or hire fees (excluding residential tenancy matters)
- goods or services provided for a previously determined price
- money lent and not repaid
- dishonoured cheques
Who may commence a debt dispute?
Any person may commence a debt dispute, provided the debt:
- is valued at no more than $25 000;
- arises from a prior agreement regarding payment of a sum of money; and
- derives from an agreement that is no more than six year old
Where a debt exceeds $25 000, but is no more than $150 000, claims are to be lodged with the Magistrates Court. For all debts exceeding this amount, disputes are to be heard in either the Supreme or District Court.
How can I resolve the dispute?
The first step in the debt recovery process is to issue the other party with a letter of demand. This letter must outline the dispute, including the outstanding sum and a defined period of time within which the dispute must be settled before legal action is commenced.
What is the QCAT Application Process?
Where parties fail to reach an agreement in the specified time frame, they may apply to have the matter heard by the Queensland Civil and Administrative Tribunal.
Lodging an application
Applicants must complete and lodge Form 3 - Application for minor civil dispute - minor debt, either in person, via post or online. Once QCAT has received the application and the accompanying application fee, they will return two stamped copies of the application - one for your records and one for the respondent. You must personally hand the respondent their copy as soon as practicable, and no later than 90 days after lodging the application.
Responding to an application
The respondent will then have 28 days from the date of service to file a response to the application. Where the respondent fails to respond to the application within this timeframe, you may apply to the tribunal seeking a default decision ending the matter, by lodging Form 6 - Request for decision by default - minor civil dispute - minor debt.
Where a response is lodged and the dispute relates to an amount exceeding $3000, the parties will be issued a notice to attend mediation. If the matter is unable to be resolved in mediation, it will be heard before the tribunal and a final decision will be made. If the amount in contention is less than $3000, the matter will advance directly to the tribunal for hearing.
Exploring the Rise of Australia's Paperless Property Market
In our increasingly digitalised world, technological advances are having an unprecedented impact on almost every facet of modern business. Most recently, the digital revolution has converged on the real estate industry following the establishment of PEXA and the paperless property market.
PEXA (Property Exchange Australia) was first developed in 2010 in conjunction with ANZ, Westpac, CBA, NAB, Macquarie Bank and the state governments of Queensland, New South Wales, Victoria and Western Australia. It followed a 2008 Council of Australian Governments (COAG) meeting which sought to modernise the paper-based property settlement process.
PEXA fosters Australia's transition to e-conveyancing by reducing the manual processing and paperwork associated with traditional conveyancing transactions. It allows lawyers, conveyancers and financial institutions to lodge documents and arrange financial settlements digitally, ensuring a faster and more convenient conveyancing process.
PEXA group executive Mike Cameron claims the move to e-conveyancing has had a resounding impact on the efficiency of Australia's property system. Unlike the traditional system, in which 20% of settlements are delayed a median of seven days, PEXA facilitates immediate settlement and payment.
Consequently, the model is tipped to resolve a class of 'irreconcilable legal decisions' associated with the priority of multiple unregistered interests. Since money is electronically transferred almost instantaneously post-settlement, PEXA reduces the gap between settlement and registration that is inherent in traditional conveyancing. Accordingly, PEXA's digital capabilities reduce the risk of a secondary interest being created in the property before registration is finalised.
Ultimately, by reducing the window of opportunity for multiple unregistered interests to be created, PEXA is set to alleviate pressure from the court system - which currently resolves such matters on a case by case basis.
The move to e-conveyancing and the potential afforded by PEXA offers exciting prospects for Australia's expanding property industry, and with PEXA having facilitated more than $100 billion worth of property transfers, it is clear Australia supports the move.
Government Announces Comprehensive Reform of Bankruptcy Law
On Wednesday the Federal Government introduced the Bankruptcy Amendment (Debt Agreement Reform) Bill 2018 into the House of Representatives, seeking to amend the existing Bankruptcy Act 1966.
The bill follows a shift in the Australian market that has seen an increase in debt agreements and subsequent decline in bankruptcies year-on-year since 2007, and has been described by Attorney-General Christian Porter as the ‘first comprehensive overhaul of Australia’s debt agreement system in a decade’.
According to the Bill's Explanatory Memorandum, the new measures serve to 'boost confidence in the professionalism of administrators, deter unscrupulous practices, enhance transparency between the administrator and stakeholders, and ensure that the debt agreement system is accessible and equitable', so that those involved should have reason to place trust in the system.
So what amendments is the Bill seeking to introduce?
Debt Agreement Assets Threshold increased to $222 000
The Bill proposes to double the current assets threshold amount and in effect, broaden the scope of debtors who are eligible to lodge a debt agreement proposal.
Under existing law, a debtor may not present a debt agreement proposal if the value of their property exceeds $111,675.20.
As such, the proposed amendments seek to reflect current Australian property prices, acknowledging that the existing asset threshold precludes a significant proportion of Australians from accessing the debt agreement system.
Payment to reflect debtor’s income
A debtor may not submit a debt agreement proposal if the total proposed payments exceed the debtor’s yearly after-tax income by a certain percentage. The Bill contains a legislative instrument which grants the Attorney-General power to determine this percentage, however is yet to stipulate an exact figure.
Maximum Three Year Period for Debt Agreements
The Bill provides that a debtor is unable to propose a debt agreement that would last longer than three years from the day the agreement is made.
Moreover, it specifies that where three years have passed and a debtor has not satisfied the obligations contained in the agreement, the agreement will continue until it terminates, ends or otherwise concludes, pursuant to Part IX of the Bankruptcy Act 1966.
Stricter Regulations for Debt Agreement Administrators
Debt agreement administrators will be required to obtain adequate and appropriate indemnity and fidelity insurance in order to have their applications for registration and renewal of registration approved by the Official Receiver.
In processing registration applications, the Inspector-General will be required to review applicants as soon as practicable and must produce a decision within 45 days of conducting an interview. The Bill also grants the Inspector-General power to deny registration where an individual is not a fit and proper person.
For a comprehensive list of the proposed amendments see Bankruptcy Amendments.
The Gig Economy and Employment Law: Why Uber is set to Drive Change
With the gig economy converging on Australia in recent years, a growing number of Australians are rejecting traditional employment in favour of casual contracts. The booming digital landscape is seeing users offer their skills and services through platforms such as Uber, Deliveroo and AirTasker, however critics are warning the model compromises the protections afforded by conventional work.
