Debt Recovery In NSW


Every business owner has had invoices that a customer has not paid, and it doesn’t look like they ever will.

When you’re not paid what’s rightfully owed, what’s the best debt recovery procedure? At what point do you find and appoint a Sydney debt recovery lawyer to oversee debt collection?

And what do you do when you’re the customer being chased to pay an invoice which is not valid?

The way you approach the debt recovery process will depend on the circumstances, but here are some general tips for small businesses:

  1. Don’t leave “old” debts hanging around for too long – there’s a six-year time limit on commencing debt recovery court action;
  2. Don’t ignore a debtor who disputes their invoice. Engage with their issues. A debtor with a genuine grievance about the goods or services involved will be far more motivated to start legal action against your business, or cross-claim against your business in any debt recovery proceedings started by you;
  3. Collect information verifying that the goods and services invoiced were in fact supplied to the customer, and were of the type, description, quality, and price agreed to by the customer;
  4. Retain a copy of your business supply Terms & Conditions at the time, or of the supply contract between you and the customer;
  5. Collect proof that the customer agreed to your supply terms and conditions, usually a signed contract or the customer’s act of acceptance of your online terms and conditions at the time they placed the order with you;
  6. With a customer who does not dispute the debt but cannot pay, make an effort to work together to work out a payment instalment plan that is mutually agreed, and then obtain a signed Admission of Debt from the debtor;
  7. Get legal advice before your business starts debt recovery proceedings in the NSW Local Court via a Statement of Liquidated Claim against the debtor, so that you can assess whether the costs and time involved will be worthwhile in all the circumstances;
  8. Don’t hesitate to contact a debt recovery law firm to provide initial advice and step in and manage the process for you, especially if the customer says they will not pay an invoice due to:
    A. non-supply of goods,
    B. the goods being faulty,
    C. other problems with those goods or services, or
    D. a dispute about the amount owing.

Stevensen Business Lawyers are your Sydney business lawyers, so contact us to discuss your next step in debt collection so that you are paid what is owed to you. We will identify the debt recovery process most likely to maximise returns to you – and then vigorously prosecute that process for you.

Frequently Asked Questions


There are several ways Stevensen Business Lawyers can help you.

  • We can write the Letter of Demand to kick-start the process for you. Where you have already issued a Letter of Demand, but it has been ignored by the customer, we can take over negotiations with the aim of settling the matter out of court. We will set out to the debtor the grounds for court action against them if the debt is not paid promptly, without a genuine dispute as to the existence of the debt or strong evidence supporting the debtor’s case.
  • Where an agreement is reached with the debtor over the disputed debt, we can prepare the Deed of Settlement recording the terms of that agreement, to avoid the possibility of later disputes as to what was agreed.
  • If the matter does end up in court, we will draw on our experience as commercial litigators who are well-versed in representing clients in highly disputed matters and complex disputes between commercial parties. Even after court proceedings have been started, your case will not necessarily go as far as final hearing or trial. The parties may settle a dispute at any time before the trial or hearing, and thus strong legal representation is paramount.