The Debt Recovery Process (NSW)

The Debt Recovery Process (NSW)

At one stage or another, every commercial business is going to come across someone who doesn’t want to, or can’t pay for a product or service you’ve provided, for whatever reason.

Like any situation, open communication should always be the first step when trying to resolve an issue, so talking to the person or business that has a debt outstanding with you, should be your first port of call.

But what happens when the person stops talking to you, ignores you or stops answering your calls or emails?

The situation can become very awkward and heightened quite quickly. You may find yourself in a position where you need professional backing from a small business lawyer or a debt recovery lawyer in Chatswood, like TY Lawyers.

Let’s talk through the steps involved in a debt recovery process if you do need to call on professional legal assistance from a commercial lawyer or small business lawyer.

First Contact

As previously mentioned, the first step is for you to make contact to request payment of the invoice and open up communication.

Initial Letter Of Demand

The person who owes money is known as the ‘debtor’.

At this stage, if the debtor has not paid or responded to any communication to come to a payment agreement, you may decide to send a letter of demand.

An experienced debt recovery lawyer can draft this for you in a professional manner. A letter of demand is a formal request to pay the outstanding amount in a specified time frame.

Usually the letter will mention that failure to respond or pay the outstanding amount by the specified time means that the next step in legal proceedings will begin.

A well-drafted letter of demand prepared and set by a lawyer can resolve debt in most cases.

TY Lawyers Chatswood have a high success rate, with over 80% of debtors responding to our letter.


If the letter of demand does not result in your owed monies being paid, you can pursue the next step - mediation. In NSW, Community Justice Centres provide free mediation services.

CJC’s staff can tell you if your situation is suitable for mediation and will then contact the other person to encourage them to participate in a mediation session.

Next Step – Legal Proceedings

If mediation fails, the next step is formal legal proceedings with a small business lawyer or debt recovery lawyer in Chatswood.

For this, you will need to complete a Statement of Claim, and file it at the Court Registry who will hear the matter.

The claim will need to include the sum of money owed and other important information in direct relation to the debt.

Once the claim is lodged in the Court, it will then need to be served to the Defendant. An experienced commercial lawyer can guide you through the whole legal process as it can sometimes be overwhelming.

How To Recover Your Monies Post Judgement

Once the judgement has been handed down, there are some instances where debtors have still not paid their debts.

There are measures you can take as the creditor in this case in terms of enforcing the judgement and ensuring you get paid, these include:

  • Writs
  • Garnishee order
  • Examination notice
  • Bankruptcy

We will discuss the ways to recover your monies post judgement in more detail in next week’s article. Stay tuned!

If you find yourself in a position where you’re owed money or an invoice has not been paid, contact TY Lawyers for a confidential discussion to discuss next steps. 

Call our friendly team today on: 02 8007 0135.

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