If you owe someone money and you have failed to repay, the creditor (the person who is owed the money) can commence legal proceedings to recover the debt. When a Complaint is served upon you, under Victorian statute law you have 21 days to respond. If you do not respond within 21 days by either acknowledging the debt, defending the claim or by filing a counterclaim, the creditor (who is the Plaintiff in the proceedings) can file a Default Judgment against you (the Defendant). Once there is a Judgment debt against you, it will show up on credit checks. The creditor will also be at liberty to issue a bankruptcy notice against you. If the debt is owed by a company, a statutory demand to wind up the company can be issued. It is much harder to set aside a bankruptcy notice or statutory demand. Ultimately, not acting at all could result in bankruptcy or liquidation for a company.
Even if you acknowledge that you do owe the debt, you risk serious action being taken against you by doing nothing. We recommend that you seek legal advice as soon as you’ve been served with a Complaint. Don’t leave it too late.
For more information please contact my team at McClure Law on (03) 9744 1881 or email email@example.com