Debt Recovery

Debt Recovery Lawyer Sydney: Recover What You Are Owed

If a customer, client or business owes you money, a debt recovery lawyer can usually move the matter from unanswered invoices to payment, judgment or insolvency action. In NSW the usual path is a letter of demand, then proceedings in the Local Court, District Court or Supreme Court, then enforcement. Against a company or individual who simply will not pay, a statutory demand or bankruptcy notice can add serious pressure.

Reviewed by Sam Saadat, Principal Lawyer, Invictus Legal. Last reviewed: 7 October 2026

Invictus Legal is a Sydney commercial litigation practice that acts for businesses, sole traders and individuals in debt recovery across Sydney and NSW. We recover trade debts, unpaid loans, unpaid professional fees and judgment debts, and we also act for people defending debt claims. If you are searching for an experienced debt recovery lawyer in Sydney, this page explains how the process works and what it costs.

What is the first step in debt recovery?

The first step is almost always a formal letter of demand from a lawyer. A well-drafted letter sets out the amount owed, the basis of the debt, a firm deadline and what will happen if the debt is not paid. Many debts are paid or a payment plan is agreed at this stage. Before sending it we check the contract, invoices and correspondence so that the claim is accurate and any interest or costs clause can be relied on. If the debtor is a company or individual in financial difficulty, we also advise early on whether insolvency tools will get a better result than court proceedings.

Which court will hear my debt claim in NSW?

The court depends on the amount claimed. Under the Local Court Act 2007 (NSW) s 29, the Local Court hears claims up to $20,000 in its Small Claims Division and up to $100,000 in its General Division. The District Court of NSW hears money claims up to its jurisdictional limit of $1,250,000 under the District Court Act 1973 (NSW). Larger claims go to the Supreme Court of NSW, which has general jurisdiction. Small claims are run with simpler procedures. Larger claims involve pleadings, evidence and sometimes a hearing. Invictus Legal appears in Local Courts and District Courts across Sydney and NSW and in the Supreme Court of NSW.

How long do I have to recover a debt?

For most contract debts you have six years from the date the cause of action first accrues, usually the date payment fell due. That is the general limitation period in the Limitation Act 1969 (NSW) s 14. A claim founded on a deed has a 12-year period under s 16. A written, signed acknowledgment of the debt or a part payment can restart the clock under s 54. Do not leave old debts too long. Evidence gets harder to find and debtors move on.

How do I enforce a judgment in NSW?

If the debtor still does not pay after judgment, you can enforce it under Part 8 of the Civil Procedure Act 2005 (NSW). Under s 106, a judgment debt can be enforced by:

• A writ for the levy of property, which authorises the Sheriff to seize and sell the debtor's goods and land.

• A garnishee order, which redirects money owed to the debtor (such as wages or a bank balance) to you.

• A charging order over shares or other securities (for Supreme Court and District Court judgments).

If you do not know what the debtor owns, the court can make an order for examination under s 108, requiring the debtor (or an officer of a debtor company) to attend court and answer questions or produce documents about their finances. After 12 years, enforcement needs the court's leave (s 134).

Can I recover interest on a judgment?

Yes. Under s 101 of the Civil Procedure Act 2005 (NSW), interest runs on the unpaid amount of a judgment at the prescribed rate unless the court orders otherwise. Interest is not payable if the judgment is paid in full within 28 days, unless the court orders otherwise. Interest also usually runs on costs orders.

Should I serve a statutory demand on a company?

A statutory demand is often the quickest way to recover an undisputed debt from a company. Under the Corporations Act 2001 (Cth) s 459E, a creditor can serve a demand for a debt that is due and payable and at least the statutory minimum, which is currently $4,000 (Corporations Regulations 2001 reg 5.4.01AAA). The company has 21 days to pay or to apply to court to set the demand aside (s 459G). If it does neither, it is presumed insolvent and the creditor can apply to wind it up (s 459C). A statutory demand is the wrong tool where the debt is genuinely disputed. The company can have it set aside, often with a costs order against you. We assess that risk before you serve. If you have been served with a demand, see our page on setting aside a statutory demand.

Can I make an individual bankrupt for an unpaid debt?

Yes, once you have a final judgment of at least $10,000 you can apply for a bankruptcy notice. Under the Bankruptcy Act 1966 (Cth) s 41, the Official Receiver issues the notice. The statutory minimum is $10,000 (Bankruptcy Regulations 2021 s 10A). AFSA states that the judgment must be no more than six years old, that post-judgment interest cannot be counted towards the minimum, and that the notice must be served within six months of issue. The debtor then has 21 days to comply. If the debtor does not comply, that failure can support a creditor's petition to the Federal Court or the Federal Circuit and Family Court. Bankruptcy is a serious step. Used properly, it is often what finally prompts payment.

What does debt recovery cost?

Cost depends mainly on whether the debt is disputed, the court it is in, and how hard the debtor is to find and enforce against. A letter of demand or a statutory demand is relatively inexpensive. A defended District Court claim is not. Fees for commercial matters are determined by the scope of work involved, and we issue a costs agreement before we commence any work, so you have full transparency from the start. Where your contract allows recovery of collection costs, we pursue them. To reduce disputes in future, consider our terms and conditions of trade service, and see our commercial law hub for related services.

Frequently asked questions

What is the time limit for recovering a debt in NSW?

For most contract debts the limitation period is six years from when the cause of action first accrues, under the Limitation Act 1969 (NSW) s 14. Debts under a deed have 12 years (s 16). A signed written acknowledgment or a part payment can restart the period (s 54).

What is the minimum debt for a statutory demand?

The debt, or total of debts, must be at least the statutory minimum, which is currently $4,000 under the Corporations Regulations 2001 reg 5.4.01AAA. The company has 21 days to pay or apply to set the demand aside.

What is the minimum debt for a bankruptcy notice?

You need one or more final judgments totalling at least $10,000, the amount prescribed by the Bankruptcy Regulations 2021 s 10A. AFSA does not allow post-judgment interest to be counted towards the minimum. The debtor has 21 days after service to comply.

Which NSW court handles debts under $100,000?

The Local Court. Its Small Claims Division hears claims up to $20,000 and its General Division hears claims up to $100,000 (Local Court Act 2007 (NSW) s 29). Claims above that go to the District Court (up to $1,250,000) or the Supreme Court.

How do I find out what a judgment debtor owns?

You can apply for an order for examination under s 108 of the Civil Procedure Act 2005 (NSW). The debtor, or an officer of a debtor company, must attend court and answer questions or produce documents about their finances. The answers help you choose the best enforcement option, such as a garnishee order or writ.

Speak with a Sydney debt recovery lawyer

Call Invictus Legal on 02 8553 0500 or book online. For urgent matters, such as a debtor moving assets, call 0410 600 230.

This page is general information only and is not legal advice. Contact Invictus Legal to discuss your situation.