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  • Writer's pictureArida Lawyers

Understanding the Process of Debt Recovery: A Concise Overview

Updated: May 11, 2023

Initiating debt recovery proceedings typically involves the careful preparation of a Statement of Claim (SOC). The SOC elucidates the specific details of the Creditor's claim, which includes the nature of the agreement, the identified breach by the Debtor, and the entitlement of the Creditor to receive damages or compensation.

Following the filing of the SOC with the appropriate court, the SOC must be served on to the Debtor, adhering strictly to the established rules. From the time of service, the Debtor has a period of 28 days to respond, make the requisite payment, file a Notice of Appearance or file a Defence. The Debtor’s inability to complete any of these steps gives the Creditor the right to apply for Default Judgment to be entered against the Debtor.

A Default Judgment is a court mandate that legally compels the Debtor to pay the judgment sum to the Creditor. It is a significant ruling that stays enforceable for 12 years from the date of issuance, granting the Creditor the authority to initiate enforcement proceedings during this period for the recovery of the judgment debt. These enforcement proceedings could include garnishees, insolvency proceedings, or writs.

The existence of a Default Judgment can complicate the Debtor's efforts to secure finance, loans, or engage in rental agreements, as it is typically registered in their credit report by credit rating agencies like Equifax.

If a Debtor wishes to challenge the Default Judgment, they have the option to reach out to the Creditor to negotiate an arrangement or directly apply to the relevant court. Several grounds exist for setting aside a Default Judgment, such as an identifiable error in the judgment, improper service of the SOC, or having a justifiable reason for not responding within the stipulated time or a reasonable basis for defending the claim.

Navigating Forward

At Arida Lawyers, our experienced team can assist Creditors with the following:

  1. Commencing legal proceedings by preparing and serving SOC;

  2. Applying to the relevant court for the Default Judgment to be entered against the Debtor if the Debtor does not make a payment, provide a response, or file a Defence within the prescribed notice period; and

  3. Represent you in enforcement proceedings against the Debtor.

We can also assist Debtors by:

  1. Responding to letters of demands and the SOC received from Creditors;

  2. Providing advice and legal representation on setting aside the Default Judgment;

  3. Providing clear guidance on your prospects of defending the Creditor’s proceedings; and

  4. Preparing a Defence and providing legal representation.

Beyond these services, Arida Lawyers extends its expertise to areas such as contract law, consumer law, and building and construction law. For a free consultation, contact us today on 1300 146 390 or at

This article provides general information relevant to our expert services. It is not legal advice and should not be relied upon as such. If you are seeking legal advice, you should contact us for a free initial consultation.

Liability limited by a scheme approved under Professional Standards Legislation.

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