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How To Respond To A Statement Of Claim Or Debt Collector

You are probably reading this because you were served with a statement of claim or served court papers by a process server.

Usually mail is unwelcome – ads or bills – but this takes it to the next level.

It seems people are quick to go to debt collectors or the court process to recover money, often claiming anything.  Often the claims are unjustified but the claimant just tries to push it through.  This practice is called “steamrolling”.  Steamrolling relies on the defendant realising it will be more expensive and costly to fight than to pay the amount claimed, so the defendant ends up paying anyway.

I’ll give some examples, which you may be able to relate to:

1. A telco over charges you and then sends you a bill. When you call up their Philippines call centre you think the whole thing is sorted out but then you find out nothing has happened except it has escalated to a debt collection process.

2. Someone you had dealings with throws a claim in court just to intimidate you. There is one firm I know who sends a whole brick of information to people for claims, most of it is irrelevant, just to intimidate them.  You receive this massive package and you think “gee this must be a serious claim” but as you go through it you realise it is just garbage.  This is unfortunately very common.  You question whether it is worth going through and responding to this garbage.

3. Someone used the wrong address to claim against you and so the whole court process is complete without you ever being aware. Now it is at an advanced stage and there is a sheriff knocking at your door (he found your address from somewhere else) trying to seize some assets.  You question whether it is worth going to the effort of correcting this.

4. Someone writes a claim that is a massive essay about how you are a bad person and you don’t know what the claim is based on much less want to pay, but you have to follow the process now and it’s a waste of your time.

So what should you do?

Step 1 – find out what is going on

Step 1 is to actually figure out what is going on.  You either owe the money or you don’t.  If you don’t, you don’t have to pay and you just need to activate the process to let them know.  If you do, then your strategy may be a little different.

Step 2 – take action

The action you take depends on the situation.  Not helpful I know, but let me give some examples.

If it’s a telco, sometimes it is easier to just call the telecommunications ombudsman and they will help you sort it out.

Clarify the basis of the claim

If it’s a firm just trying to intimidate you, or just a series of insults, the first thing to do is write back and ask for further particulars – i.e ask them exactly what their claim is, how it came about, and what they are relying on to support the claim.

Claims need to be specific.  E.g. you entered into a contract on this date in which you agreed to pay $X to Bob when the job was completed.  The job was completed.  Now pay Bob $X.

You need to persist until you get something simple like this that you can understand.  If not, there will be a directions hearing or court process in which you can let the Court know that you don’t understand what the claim is, you’ve written to them about it, and you’ve got no response.  You can then ask the Court to make an order that they provide you with the information.

Write a defence

Once the claim is simplified for you, then you can look at your defence.  Let’s use the above example about needing to pay $X to Bob Li when the job was completed.  Maybe the job wasn’t actually completed in which case your defence can be “the job wasn’t completed” and you can let them know what evidence you have that shows that.  Or it could be Bob Li did a bad job and you actually want to make a counter claim for the damage he caused.

Ultimately they need to make the claim out, not you, but it is always better if you have some proof on your side too.

This is why it is always good, as a matter of habit, to keep good records.  Evidence in writing is always the best.

Don’t be intimidated by the process

The entire court process with all the fancy words and papers is just a way of working out what the heck someone is claiming and what proof they have.  Sometimes it’s a weird area of law where there is an obligation that you didn’t know about but a lot of the time it will be common sense and the facts.

When in Court you’ll be dealing with a judge or registrar.  These are people, just like you and me, so there is an element of random factor in the decisions they make.  Always know this, but know that this random factor affects your opposition too.