After my last blog on the legal system I was sent a pearler of a story; “Melbourne Mum loses bankruptcy battle over school fees”, (Ninenews.com.au).
The cost of solving a problem with lawyers has always been an issue for me, the process takes longer, and is more costly than you ever expect, and even then when you get there on the day you can still lose for no apparent reason. It is for this reason that I will often be over cautious rather than less cautious with the commencing of litigation. One thing is for sure I would never employ a lawyer to fight over $5,000.
In the article I received a mother was advised to fight a $5,000 debt for school fees on the basis that the school “had become a credit provider and thus the school should have means tested her.” Such an argument could only have been constructed by a knowledgeable and diligent lawyer.
At the end of the day the Registrar (in my mind demonstrating exceptional common sense) threw out the argument. The result was a sequestration order declaring mum bankrupt, coupled with an increase in the amount owing to the school to almost $20,000. Mum was also probably still in debt to the Lawyer who was now nothing more than a Creditor in the Bankrupt Estate!
I would anticipate that such a defence would have cost more than the original $5,000 thus negating any relevance of a means test. The simple message, if you owe it pay it, if you can’t pay it make an honest and up front disclosure and endeavour to find a solution. If you do this, then hopefully if you ever end up in court it will be the party acting like an idiot that will lose.
They certainly did in this case.