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What can I do if I am being sued for debt?

What can I do if I am being sued for debt? If the amount owed is $100,000 or less, a creditor (known as the plaintiff) will serve a document called a Magistrates Court Complaint on you. The court requires that it be served in person on any person over 16 living at your address. The Complaint will bear a court number and have attached two copies of a blank Defence form for you to complete. You should seek legal advice immediately. You have 21 days from the date of service to lodge your Defence (if any) with the Court and to send a copy of it to the address for service of the creditor (often this will be the creditor’s solicitor). If you do nothing, the Court will make an order in your absence that you owe the debt, plus legal costs, plus interest. Interest will accrue on the debt at a rate set by the Penalties Interest Rates Act 1983, which is currently (31 May 2007) 12.00 % a year. If you agree that you owe the debt, you should, before the matter goes to court, enter a written agreement with the creditor to pay by instalments and ensure that the creditor files a Notice of Discontinuance with the court, which will stop the court action against you. If you do not agree you owe the debt, or all of the debt, you will need to file a Defence even if you are discussing the matter with the creditor.

Remember: this information only applies to the Magistrates’ Court of Victoria. Different rules apply to other courts and tribunals in Victoria and outside Victoria. You should always seek legal advice if court action is threatened or taken against you.