Find out how to enforce a payment in Tasmania. For an overview on enforcing payments click here.
STEP 1: Informal Communication
What is this?
The more formal Steps 2 and 3 (Letter and potential Court action) could be intimidating to the other party, so you should try to salvage the existing relationship. As such, you should attempt to re-establish informal contact with them by perhaps phone or email. We recommend this because at times, the unpaid invoice could be a result of a simple oversight or misunderstanding, and a phone call here could be a solution. If you are unsuccessful with this step, proceed with Step 2.
STEP 2: Send a Letter of Demand
What is a letter of demand?
Your first call of action to chase up the money should be through a Letter of Demand. Essentially, this is a letter sent to the other party where you formally notify them in writing, about the financial matter.
This letter should include:
· An outline of the dispute
· The money outstanding
· The defined period to settle the matter. If the specified time period passes with no resolution, you will need to face legal action in court.
Things to Avoid
You should be able to form this letter yourself, or you may also choose to seek advice from a legal professional. If you choose do to it yourself, you must NOT:
· Harass the other party, because they can report it to government agencies or the police
· Attempt to mimic a court document in an effort to raise the chances of payment. This intimidation tactic is illegal.
Potential Outcomes of a Letter of Demand
After sending the letter, there are a few outcomes which can result:
· They might pay the full amount owed.
· They could formally prove that no money is owed.
· You and the other party may be able to negotiate a compromise, this could be in the form of instalments or part payments.
· They could ignore it or respond unsatisfactorily, in which case you will need to progress to Step 2.
STEP 3: Small Claims debt recovery action
What is it?
This is a relatively informal local court action, which you can do yourself. It is applicable to money, goods purchased/delivered, labour or a combination of these. In Tasmania, the Minor Civil Claims Division of the Magistrate’s Court is available as an option for claims of debt up to $5000.
How to do it:
This process has three sub-steps.
- You can attempt to negotiate for a settlement at any point before the hearing. If no agreement is reached and the hearing date has arrived, then you should proceed to court to obtain a favourable judgment.
- During the hearing, generally, most will be self-represented unless otherwise granted. This will explain your view on what happened with evidence (e.g. receipts, emails, photographs, etc.) to support your claims – all done under oath. Then, the other party will do the same for their side. Following this, the Magistrate will make a decision which is binding.
Still unsure of how to recover your money in TAS or need a lawyer to sign off on the Letter of Demand? Contact a LawPath consultant on 1800LAWPATH to learn more.
