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Collecting small debts

You’d be surprised how often we are asked to collect small debts. The practical reality is that small debts are usually not worth collecting, not least because you normally cannot recover legal costs for debts less than $10,000 in Western Australia.

As a general rule, if the amount of the debt doesn’t justify the expense of a Get Paid Legal Demand, it isn’t worth your time worrying about.

What can you do?

We don’t often promote our competitors’ offerings, but you might want to send these debts to a commission-based debt collector. They will usually try to irritate your debtor by sending regular letters and text messages. This type of campaign is rarely effective, but at least you don’t throw good money after bad.

Your other option is to commence a Minor Case Claim (Form 4) with the Magistrates Court of Western Australia. Generally, neither party is able to be represented by a lawyer and strict rules of evidence do not apply (think Judge Judy!).

Avoiding bad debts

It can be as simple as asking for payment before delivering the goods or performing the service. A strong set of terms of trade is essential to making sure your work gets rewarded. We can review your existing terms or prepare a new set for you. Contact us to get started.

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Our plain-English guide explains the debt collection process for trade and commercial debts under $75,000 in Western Australia.