Demand and Summons for Debt - WA

Does someone owe you money or something else and won't pay up?

It took you a long time to earn that money or provide that service. Now is the time to prepare yourself to recover your money.

Does the Debtor think that the debt is too small for you to see a lawyer? Well now there is no need.

You are now on the way to drafting both:

1. Letter of Demand; and
2. Claim.

Picture this: You send the Letter of Demand to the Debtor. The Letter of Demand is unpleasant and makes most Debtors stand up and take notice of your demand for payment. The Letter of Demand also complies with the legal requirement to ask the Debtor for the money before you can sue.

What makes it better is that enclosed with the Letter of Demand is the draft Claim. Some people view Letters of Demand as idle threats. But you have gone to the trouble of preparing up the draft Claim. You are already in action. The Debtor looks at the draft Claim and says, "This person is going to sue me. They are serious. If I don’t pay up all they have to do is lodge the draft Claim at the Magistrates Court."

Note that you can’t use the draft Claim as a debt collecting threat. If you do serve the draft Claim with the Letter of Demand, then you need to have the intention to later lodge and serve the Claim. You can change your mind after you send the Letter of Demand. But at the time of sending the Letter of Demand and draft Claim, you must have the intention to lodge and serve the draft Claim if the debt is not met to your satisfaction.

The combination of the well-drafted Letter of Demand with the draft Claim is powerful. “Pay up or see you in court!” is no longer an idle threat.

What if the Debtor decides to tough it out and not pay you? Then the draft Claim, that you have already prepared, just needs to be lodged at the Magistrates Court. The Court can arrange for the service of the Claim on the Debtor.

When you build your Letter of Demand and draft Claim you get a free Debt Collecting Kit. This explains everything you need to do from sending the Letter of Demand right up to the lodging the Claim at the Magistrates Court.

Download the Demand and Summons for Debt - WA Checklist

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Debt Owed To
• Want to sue someone in another state?
• Who is the Creditor? Who is the Debtor?
• There are 4 Creditors, do I have to put them all?
• Are you a Company, Human Being or Business Name?
• Can you sue for sums greater than $75,000?
• What if I only claim for a few hundred dollars?
• Does 'ACN' stand for 'Australian Company Number'?
• What jurisdiction does this work in?
• Do I have to put my telephone number?
Who Owes the Debt
• Which one is the Debtor? Which is the Creditor?
• How many Debtors do I put in?
• Make sure you sue the correct person
• Frank owes me $200 and Fred owes me $750 sue both?
• The Debtor is a trustee. Who do I sue?
Claim Amount
• Only put in numbers (not words)
• Can I sue for more than $75,000?
• What if I only claim for a few hundred dollars?
• Debtor owes you a service or goods - not money?
• You want your money back
Cause Of Action
• What is a Cause of Action?
Service Details
• How should I serve the Claim?
• There is a 'Letter of Demand' and a 'Claim'. This is only for the Claim.
Date of Letter
• Put in the date you are going to send the letter
• I don't know the date I am sending the Demand Letter

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Debt Owed To

• Want to sue someone in another state?

  QUESTION: I have a debt I need to recover. The guy is in NSW. We live in WA and trade out of WA. Which document should I use?
  
  ANSWER: There are 2 issues. You want to sue in your jurisdiction because it is easier. You live there and you can go to the court close to you. Less travelling is required. So it is generally best to sue someone in your home state where you live.
  
  However, this may not always be fair to the debtor. If you signed the agreement in the other state and you said that you would sue in that other state if something went wrong then it would be unfair to sue in your home state. Apart from that issue you are welcome to sue in your home state.

  This hint is provided by Law Central Legal.

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• Who is the Creditor? Who is the Debtor?

  The Creditor is the person that lent the money. The Debtor is the person who borrowed the money and hasn't paid it back.
  
  If John Smith and Jenny Smith lent the money then both these Creditors should be mentioned separately as Creditors.

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• There are 4 Creditors, do I have to put them all?

  The Letter of Demand and Summons should be as correct as possible. If 4 people are the Creditors then all 4 people should be mentioned.
  
  You will need to press "Add" and keep adding the Creditors until all of them are individually mentioned.

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• Are you a Company, Human Being or Business Name?

  A company can lend you money. A human being can lend you money.
  
  COMPANY
  Let's say the first person you insert as a Creditor is a company. You press the Company button on the top of the page. You then fill out the company details - "Company Name" and "ACN". The Company Name must look like one of these:
  
  ************ Pty Ltd (most common)
  ************* Ltd (this is a Public company)
  ****************NL (this type of company is only for Public mining companies)
  
  If you don't have the company’s correct name or ACN then you should do a free search for their correct details at www.asic.gov.au. Remember you want to be as correct as possible. What does being correct show? It means that you are serious in recovering your money from the Debtor. Also, only the Creditor can recover the money. Therefore if Jenny and John sue for the money, but the money is really owed to their company then they won't win. In this scenario the wrong person is suing. They should have sued in the company’s name.
  
  Look at your loan agreement, contract or the invoice that you gave the Debtor. Make sure the right person or persons are suing the Debtor.
  
  HUMAN BEING
  Each human being needs to be inserted separately. This time click on human. Use the Creditor's full legal name. Be as correct as possible.

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• Can you sue for sums greater than $75,000?

  No you can't.
  
  The Magistrates Court only allows you to recover up to $75,000 plus costs.
  
  If your debt is for $80,000 and you sue in the Magistrates Court then you can only recover up to $75,000.
  
  If you want to recover more than $75,000 then you need to sue in a higher court - such as the District Court or Supreme Court.
  

  This hint is provided by Law Central Legal.

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• What if I only claim for a few hundred dollars?

  It doesn't matter. For example, your mate borrowed a few hundred dollars from you. He signed an agreement to pay you back in two weeks. It is 6 months down the track and there is no sign that he will pay your money back.
  
  You can use the Law Central debt recovery document to sue the person who owes you money.
  

  This hint is provided by Law Central Legal.

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• Does 'ACN' stand for 'Australian Company Number'?

  Yes, it does. If you are inserting a company as a Creditor then select 'Company' and only complete the 'Company Name' and 'ACN' (and of course the address).
  
  The government introduced numbers for companies back in 1989. It helps identify the company.
  
  Don't know your ACN? Then you can do a free search for your company at www.asic.gov.au.
  
  When entering your ACN, make sure that you type the letters ACN before your Company number. E.g. ACN 44 1234 5678

  This hint is provided by Law Central Legal.

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• What jurisdiction does this work in?

  This letter of demand works Australia wide. However, the Claim is only for lodging at a Magistrates Court in Western Australia.

  This hint is provided by Law Central Legal.

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• Do I have to put my telephone number?

  You are not legally obliged to put in your telephone number. You can provide it so that the Court or the debtor can contact you if necessary.

  This hint is provided by Law Central Legal.

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Who Owes the Debt

• Which one is the Debtor? Which is the Creditor?

  The Debtor is the person that won't pay the Creditor back their money. You the Creditor, lent money to the Debtor.
  
  Each Debtor needs to be mentioned. If you lent money to both a Husband and Wife then you need to press "add" twice to individually enter both of them into Law Central.

  This hint is provided by Law Central Legal.

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• How many Debtors do I put in?

  If John Smith only owes you the money, then John Smith is the only Debtor.
  
  If John Smith and his company owe you the money for the goods you supplied, then you have 2 Debtors.
  
  If however, John Smith and Mrs Smith guaranteed the debt for the company, then you have 3 Debtors. All 3 Debtors have to be included.
  
  Just make sure you include all the Debtors.

  This hint is provided by Law Central Legal.

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• Make sure you sue the correct person

  Make sure you know the exact full name of the person you are suing.
  
  The more exact you are the better the documents look and the easier it is to get the documents served on the Debtor.

  This hint is provided by Law Central Legal.

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• Frank owes me $200 and Fred owes me $750 sue both?

  Be careful. You may need 2 Letters of Demands & Claims.
  
  Obviously if you went out and lent Frank and Fred some money, both would be liable. If this was the case then you can sue them together and do the letter of demand together.
  
  But if they were just 2 trade creditors that didn't even know each other then prepare separate Letters of Demand and Claims.

  This hint is provided by Law Central Legal.

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• The Debtor is a trustee. Who do I sue?

  You sue the Trustee.
  
  E.g. Smith Nominees Pty Ltd is the trustee of the Smith Family Trust - sue Smith Nominees Pty Ltd.
  
  E.g. Mark Spencer as trustee of his wife - just sue Mark Spencer.
  
  E.g. Colin Atkins as trustee of the Atkins Family Trust - just sue Colin Atkins.
  
  You don't need to refer to the fact that you are suing the Debtor in their capacity as Trustee. It isn't generally relevant. The Trustee is liable for the Debt. They can seek to get the money out of trust funds or from the beneficiaries. That is not your business. You just want the money.

  This hint is provided by Law Central Legal.

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Claim Amount

• Only put in numbers (not words)

  Please only put in numbers e.g. 3456.34
  
  Don't write in any words.
  
  

  This hint is provided by Law Central Legal.

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• Can I sue for more than $75,000?

  The Magistrates Court's jurisdiction is $75,000. If the Debtor owes you $80,000 then you will need to sue in another Court or reduce your claim down $5,000 to $75,000.

  This hint is provided by Law Central Legal.

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• What if I only claim for a few hundred dollars?

  It doesn't matter. For example, your mate borrowed a few hundred dollars from you. He signed an agreement to pay you back in two weeks. It is 6 months down the track and there is no sign that he will pay your money back.
  
  You can use the Law Central debt recovery document to sue the person who owes you money.
  

  This hint is provided by Law Central Legal.

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• Debtor owes you a service or goods - not money?

  That is OK. You can just liquidate your damages.
  
  Let's say that you paid the plumber $8,000 to do the kitchen. He took $4,000 up front and never came back. You can sue him for the return of the $4,000.
  
  What about the gardener? He put in $12,000 worth of plants and they all died a week later. You need to recover that $12,000 from the gardener. Send the Letter of Demand. Wait 2 weeks and hit him with the claim.
  
  You need some work for a client. It was a $54,000 job. Half way through the client tells you he doesn’t want to proceed. You total up your costs to date. It is $22,000. Sue the client for that $22,000.

  This hint is provided by Law Central Legal.

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• You want your money back

  What do I do if I am not happy with the goods or services supplied to me?
  
  The Magistrates Court helps to resolve disputes between you (the consumer) and the trader/supplier about the sale, supply or hire of goods and services.
  
  The amount in dispute must be $10,000 or less. Disputes are heard before a referee, who is a legal practitioner. You need to use another application form.
  
  This Law Central document does not apply to you.
  
  The Magistrates Court can be contacted for more information on Consumer/ Trader Claims. Magistrates Court of Western Australia, Perth Registry Central Law Courts 501 Hay street, Perth, WA 6000.
  

  This hint is provided by Law Central Legal.

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Cause Of Action

• What is a Cause of Action?

  These are the details of the claim that you are making against the Debtor.

  This hint is provided by Law Central Legal.

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Service Details

• How should I serve the Claim?

  Claims can be served by:
  
  1. a Bailiff of the Court - this is the most common way as the bailiff knows how to get the job done; or
  
  2. yourself - if you have the time and energy to do it.

  This hint is provided by Law Central Legal.

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• There is a 'Letter of Demand' and a 'Claim'. This is only for the Claim.

  The 'Letter of Demand' can be posted or hand delivered. That is your decision. This question is not about how you get the Letter of Demand into the Debtor's hands. This question is only about how the Claim is to be served once you lodge it with the Magistrates' Court.
  
  You send out the Letter of Demand with the draft Claim.
  
  However, if you don't get paid then you lodge the 'Claim' at the Magistrates Court. At the Magistrates Court they ask you how you would like the Claim served on the Debtor. Most people opt to let the Court's Bailiff serve the Claim.
  

  This hint is provided by Law Central Legal.

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Date of Letter

• Put in the date you are going to send the letter

  If you are sending or posting the letter today then put in today's date.

  This hint is provided by Law Central Legal.

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• I don't know the date I am sending the Demand Letter

  Law Central wants your document to be as correct and professional as possible. That way you are more likely to get back your money.
  
  The Letter of Demand needs a date. You will need to insert the date that you are going to send the letter. That date appears in the Letter of Demand.

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This document has been prepared by Law Central Legal

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