Kinh tế học - Chapter 16: Debt recovery

This is the prescribed textbook for your course.Available NOW at your campus bookstore!Copyright © 2000 McGraw-Hill AustraliaDebt recoveryChapter 16Copyright © 2000 McGraw-Hill AustraliaDefinitionsDebtors: Those people who owe money to others.Creditors: Those people who are owed money.2Copyright © 2000 McGraw-Hill AustraliaCreditworthiness checkProof of identity of applicant - Name - Address - Assets and liabilities - Employment status If company: - Name of Directors - Address of Directors - Paid-up capital of companyCredit referencesConfirm ownership of property3Copyright © 2000 McGraw-Hill AustraliaCredit policyCredit policy should be notified to debtor. e.g. When payment is due  Acceptable methods of payment  Interest charges for late payments4Copyright © 2000 McGraw-Hill AustraliaPunctual paymentIncentives to encourage punctualpayment of debts:Discount for early paymentCredit charge for late paymentNotification of overdue accounts - account rendered sent - personal phone call5Copyright © 2000 McGraw-Hill AustraliaDebt collection process ACCOUNT RENDERED (for unpaid account)LETTER OF DEMAND  Details of debt  Date debt incurred Debt Collection  Specify date payment to be made Agency  Specify legal proceedings will result PAYMENT Negotiation or LEGAL MADE Mediation or PROCEEDINGS Arbitration COURT ISSUES SUMMONS AFFIDAVIT OF SERVICE OF Particulars of claim: SERVICE SUMMONS  Names - plaintiff and defendant Proof of service  Given to  Addresses - plaintiff and defendant of Summons Defendant  Details plaintiff’s claim6Copyright © 2000 McGraw-Hill AustraliaDefendant - possible responsesService of Summons Agrees to Pay Agrees to Pay Through in Lump Sum in instalments Court Dispute Claim via Judgement Against Filing Defence Defendant (Judgement in Default) For Defendant For Plaintiff Judgement Finish Plaintiff - Judgement Creditor Defendant - Judgement Debtor7Copyright © 2000 McGraw-Hill AustraliaEnforcement of the judgementENFORCE THE JUDGEMENTEXAMINATION SUMMONS/ORAL EXAMINATION Ability of debtor to pay is examinedINSTALMENT EXECUTION BANKRUPTCY ORDER AGAINST GOODS PROCEEDINGS Payment by  Seizing goods of debtor and Debt > $2000instalment. selling to satisfy amount owing GARNISHEE ORDER EXECUTION  Paid on behalf of debtor AGAINST LAND by employee or bank  Sell land owned by (ATTACHMENT OF debtor at public auction EARNINGS ORDER) 8Copyright © 2000 McGraw-Hill AustraliaUnacceptable behaviour when collecting debtsConsumer Credit CodePrevents debt collector from entering residential property to repossess goods.State Trading ActsProhibits the use of physical force or undue harassment or coercion.Trade Practices Act 1974 (Cwlth)Prohibits the use of physical force or undue harassment or coercion by corporations.9Copyright © 2000 McGraw-Hill Australia