So, you’ve just received a statement of claim and you don’t know what to do with it?
Whilst you may be tempted to just add it to the pile of junk mail and forget about it, you may want to think twice about doing so. If you have received a statement of claim you have 28 days from the date you received it to consider your options and, if necessary, file a defence.
So, what happens if you just leave it in the pile of junk mail, will it just go away?
Unfortunately deciding to ignore a statement of claim can have a snowball effect. If. after 28 days, you decide to do nothing, the party who issued the statement of claim may apply to have default judgment entered against you. They may then seek to enforce the judgment to recover the debt by, for example:
1. Issuing a garnishee order to deduct payments from your wages or any rental income you usually receive to pay the debt
2. Issuing a writ allowing a sheriff to seize your personal property to pay for the debt
3. Commencing bankruptcy proceedings against you
4. A combination of the above.
If a judgment is entered against you this can affect your credit rating and this may make it difficult for you to obtain credit in the future.
So, what should you do if you receive a statement of claim?
As a starting point, you should seek legal advice about the options available to you having regard to the facts and circumstances of your particular matter. By doing this you will be able to place yourself on the front foot from the outset.
There are several options which may be available to you, for example:
5. It may be that you have a valid defence to the claim and should file a defence and defend yourself in Court proceedings.
6. You may be able to negotiate with the party that issued the statement of claim to reach a settlement without having to resort to protracted and costly Court proceedings. This will of course depend on your individual circumstances and the attitude of the other party.
7. You may admit that you owe the amount claimed in the statement of claim… You may be able to negotiate an agreement with the other party to pay the amount claimed by way of installment payments.
These are just some of the many options that are available to you if you are served with a statement of claim.
For further information, contact the Commercial Litigation Team at Watkins Tapsell on (02) 9521 6000.