Recovering Outstanding Debts in Australia: Your Options Explained

Vivian Nguyen • April 7, 2025
A bunch of coins are falling on a wooden table

Dealing with unpaid invoices and outstanding debts can be a significant challenge for businesses and individuals alike. Several effective strategies exist to recover what is owed to you. 


  1. Letters of Demand: Your First Step

    A letter of demand is a formal written notice to the debtor from a solicitor, requesting payment of the outstanding debt within a specified timeframe. It serves as a clear and concise reminder of the debt and the consequences of non-payment. Having a lawyer draft this letter can add weight to the request.

  2. Debt Collection Agencies: Leveraging Professional Assistance

    You may use an agency when initial attempts to recover the debt have been unsuccessful,  you lack the time or resources to pursue the debt yourself and/or the debtors are persistent or difficult debtors. Debt collection agencies have specialised knowledge and experience in debt recovery.

  3. Statutory Demand: Liquidating the debtor

    This can only be used if the creditor is a company and the debt is over $4,000.00. It is a formal court notice that if the creditor does not pay, they will be wound up.

  4. Statement of Claim: Taking Matters to Court

    When all other attempts to recover the debt have failed or if the debt is substantial, you may choose this option. This can include Small Claims action, Local or District Court Proceedings. A Court judgment can compel the debtor to pay the debt and/or obtain a court order to seize assets or garnish wages. However note that this avenue can be time consuming and costly.


 Key Tips for Debt Recovery

  • Maintain Accurate Records: Keep detailed records of all transactions, invoices, and communication with debtors. 
  • Act Promptly: The sooner you address an outstanding debt, the greater your chances of recovery.
  • Communicate Clearly: Maintain clear and professional communication with debtors.
  • Seek Professional Advice: Consult with a lawyer or debt recovery specialist for guidance and support.


Recovering outstanding debts can be a challenging process, but by understanding your options and taking appropriate action, you can increase your chances of success.

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