Let’s be real – chasing debts sucks
No one enjoys having to ask for money they’re owed. Whether you’re a tradie who hasn’t been paid for a job, or a business owner who keeps getting ghosted after delivering the goods — chasing down unpaid invoices is exhausting.
It’s awkward. It’s time-consuming. And yeah, it can get a bit emotional, too. Especially if you’re a small business and that unpaid amount is the difference between making payroll or not.
So what can you actually do about it? Can you recover the debt without nuking the relationship? And when do you need to bring in the big guns?
That’s what this is all about.
Let’s walk through it – no legalese, no fluff, just straight talk.
First things first: do the basics. You’d be surprised…
A lot of people panic and jump straight to legal threats. But honestly? The first step should always be a polite reminder.
Sounds obvious, right? But you’d be surprised how many debts get cleared up with a simple phone call or email. Something like:
“Hey mate, just touching base on that invoice from last month – looks like it's still outstanding. Any issues on your end?”
Sometimes it’s just slipped through the cracks. Happens all the time. Especially if you’re dealing with bigger businesses or sole traders wearing five different hats.
Pro tip: attach the invoice again, even if you think they’ve got it. Saves them hunting for it.
Now, if that doesn’t work…
Alright, so they’ve had a reminder. Maybe two. You’ve tried calling, maybe even texted. Still nothing.
Here’s where you step it up — without going full nuclear.
Issue a formal letter of demand. Doesn’t need to be aggressive or nasty — just clear, professional, and with a deadline.
Something like:
“Unless payment is received by [date], we may have no option but to pursue further action.”
You’re basically saying, "We mean business now." But still giving them an out.
Worth noting: keep records of everything. Emails, messages, call attempts. It'll matter if things escalate.
Still nothing? Here’s where it gets serious
If they’re still ignoring you, or giving you the runaround — that’s when you’ve got to decide whether to escalate.
Now, there’s a few paths here:
1. Debt collectors
Yep, old-school but still around. Debt collection agencies chase the debt on your behalf — usually for a percentage of what they recover. Could be anywhere from 10% to 50%, depending on how old or tricky the debt is.
Good for: debts that are relatively small, where it’s not worth a legal fight.
Not so good for: situations where you want to preserve a relationship, or where there’s a dispute about the quality of goods or services.
Some collectors are aggressive. Others, not so much. Just make sure they’re licensed and follow the ACCC guidelines — there are rules around harassment, after all.
2. Legal action
Now we’re in the territory of courts, lawyers, statements of claim — all that fun stuff.
Thing is, this doesn’t have to mean a dramatic courtroom showdown. A lot of cases settle quickly once legal proceedings are started. Just the act of filing can be enough to shake loose a stubborn debtor.
You can go to:
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Small claims tribunal (like QCAT in Queensland): if the debt is under a certain amount — usually quick and low-cost.
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Magistrates’ or Local Court: for larger amounts or more complex cases.
Bit of a headache? Sometimes. Worth it? Depends how much you’re owed and how solid your paperwork is.
Now, here's where you want a lawyer who knows their stuff — commercial, contracts or litigation lawyers are the go-to. If you're up in North Queensland, PD Law are worth talking to — they've got experience with the whole spectrum of debt recovery strategies, from gentle nudges to full-on litigation.
Let’s bust a few common myths
“If they don’t pay, I’ll just blacklist them.”
Yeah, no. Unless you're part of a credit bureau or similar, there’s no official “blacklist.” And you definitely don’t want to be making defamatory statements or outing people publicly — that can backfire fast.
“I’ll just add interest or late fees.”
You can — but only if your contract or invoice terms said so up front. Can’t just tack it on afterwards because you’re cranky. (As tempting as that might be.)
“It’s not worth chasing small debts.”
Maybe. But it depends. Sometimes it’s not about the amount — it’s about the principle. And if someone’s done this to you, they’ve probably done it to others. Nipping it in the bud might save you (and others) a lot of grief down the line.
Real world example: when chasing pays off
A small design business had a client disappear after delivery — $3,200 unpaid. Not massive, but significant. They sent three follow-ups, no reply. Issued a letter of demand — still nothing. Finally, they got legal help, filed a claim with the small claims tribunal.
Guess what? The client responded within days of receiving the tribunal notice — and paid in full. Didn’t want the hassle.
Moral? Sometimes, just showing you're serious gets results.
So what does this mean for you?
If you’re sitting on an unpaid invoice and wondering what to do — start simple. Don’t let the frustration cloud your steps. Follow the ladder:
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Reminder
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Letter of demand
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Debt collector or lawyer
And always — always — keep your paperwork neat. Contracts, invoices, emails, timelines… makes it ten times easier to enforce.
Also, review your payment terms. Are they clear? Do you require deposits? Can you automate reminders?
Fixing the front-end stops a lot of back-end dramas.
FAQ – Questions people actually ask
Can I charge late fees if they don’t pay on time?
Only if you’ve clearly stated that in your terms before they accepted the work.
What if the debtor is overseas?
Trickier. Still possible, but you’ll likely need a lawyer who understands cross-border enforcement. Not always worth the effort unless it's a big sum.
How long do I have to recover a debt in Australia?
Six years from when the debt became due. After that, it’s usually too late legally — but check with a lawyer to be sure.
Do I have to go to court to recover money?
Not always. In fact, most debts get resolved before that — with a letter of demand, a payment plan, or a quick negotiation.
Can I refuse to work with someone who hasn’t paid in the past?
Absolutely. You’re under no obligation to keep working with clients who burn you. Just stay professional and keep a paper trail.
Final thoughts – protect yourself before it happens
Look, chasing money is never fun. But the better your systems upfront — clear contracts, deposit policies, automated invoicing — the less likely you’ll end up in debt recovery hell.
And if you do end up there? Don’t panic. There are options. There are steps. And there are professionals who deal with this stuff every day.
If you’re dealing with a stubborn unpaid debt and it’s getting a bit beyond you, best to speak with a commercial lawyer who’s seen it all before. A firm like PD Law can help you sort through the mess and figure out the most cost-effective next step.
Disclaimer: This article is general information only and not legal advice. Always speak with a qualified lawyer about your specific situation.
