What to Do When a Client Refuses to Pay After You’ve Finished the Work

You finished the job. You sent the invoice. The payment date came and went. Now the client is ignoring your emails, making excuses, or outright refusing to pay.

Here’s the escalation path from polite reminder to formal tribunal proceedings.

Step 1: Send a Polite Invoice Reminder (Days 1-7 After Due Date)

Start with the assumption that the non-payment is an oversight. Invoices get buried. Accounts payable teams make mistakes.

Send a brief, professional reminder:

• Reference the original invoice number and date
• Restate the amount owing
• Attach the invoice again as a PDF
• Set a new payment deadline (typically 7 days)
• Keep the tone neutral

Timeline: Within 7 days of the original due date.

If the client pays, you’re done. If they don’t respond, move to the next step.

Step 2: Send a Firmer Follow-Up (Days 8-14)

Send a second email with a firmer tone:

• State clearly that payment is now overdue
• Reference your terms of trade or contract (if applicable)
• Mention that continued non-payment may result in formal action
• Offer a payment plan if you suspect cash flow issues
• Set another deadline (7 days)

Timeline: 7-14 days after the original due date.

Some clients will pay at this stage. Others will start negotiating. If they propose a payment plan, get it in writing. If they continue to ignore you, escalate.

Step 3: Letter of Demand (Days 15-30)

A Letter of Demand is the formal notice that precedes legal action. It’s not a court document, but it signals you’re prepared to take the next step.

A Letter of Demand should:

• Identify the parties clearly
• State the amount owing with precision
• Reference the contract, invoice, or agreement that created the debt
• Give a final deadline for payment (typically 7-14 days)
• State the consequences of non-payment (tribunal proceedings, statutory demand, or court action)

Timeline: 15-30 days after the original due date, once informal reminders have failed.

Receiving a properly drafted Letter of Demand makes the client realise you’re serious.

Claim Done generates a Letter of Demand for $49. You tell us about your invoice, contract, and any correspondence. The system works from your answers, drafts the letter, and delivers it by email.

Step 4: Statutory Demand (If the Client is a Company and Owes $4,000+)

If your client is a registered company (Pty Ltd or Ltd) and owes you $4,000 or more, you can issue a statutory demand under the Corporations Act.

A statutory demand gives the company 21 days to:

• Pay the debt in full, or
• Apply to set aside the demand, or
• Face presumed insolvency and potential wind-up proceedings

Requirements:

• Minimum debt of $4,000
• Company debtor (not a sole trader or individual)
• Liquidated sum (a specific, ascertained amount)
• Undisputed debt (do not use if there’s a genuine dispute)

Timeline: Can be issued after a Letter of Demand is ignored, or immediately if the debt meets the criteria.

Claim Done prepares the statutory demand and supporting affidavit template for $97. If the company fails to respond within 21 days, you can apply to wind up the company — which typically results in payment or settlement.

Step 5: Tribunal Application or Court Claim (Limits Depend on Your State)

If the client is an individual, sole trader, or partnership, or if the debt is under the statutory demand threshold, your next step is the relevant state or territory tribunal or court.

Depending on the state, a money claim goes to a tribunal or to the Magistrates or Local Court, each with its own limits:

• New South Wales: Local Court of New South Wales — Small Claims Division up to $20,000; General Division over $20,000 up to $100,000 (not NCAT, which hears consumer claims brought by consumers)
• Victoria: Victorian Civil and Administrative Tribunal (VCAT), Civil Claims List
• Queensland: Queensland Civil and Administrative Tribunal (QCAT) — minor civil dispute, up to $25,000
• Western Australia: Magistrates Court of Western Australia — minor case claims up to $10,000; general procedure claims up to $75,000
• South Australia: Magistrates Court of South Australia — minor civil action up to $12,000; general claims up to $100,000
• Tasmania: Magistrates Court of Tasmania (Civil Division) — claims up to $50,000
• Australian Capital Territory: ACT Civil and Administrative Tribunal (ACAT) — civil disputes up to $25,000
• Northern Territory: Northern Territory Civil and Administrative Tribunal (NTCAT) — small claims up to $25,000

What you need:

• Completed tribunal application form or statement of claim
• Copy of the invoice and contract
• Evidence of the work completed (photos, timesheets, emails, delivery receipts)
• Proof of delivery of the Letter of Demand
• Filing fee (filing fees change each 1 July; check the current fee on the tribunal’s or court’s website before you file)

Timeline: File within 6 years of the debt arising (limitation period in most Australian states).

Small claims are designed to be accessible without a lawyer. Present your evidence clearly, stick to the facts, and let the tribunal or court decide.

Claim Done prepares tribunal applications for $97. You tell us what evidence you have, and the system drafts your application (for a New South Wales debt, a Local Court statement of claim) and a witness statement. You attach your own evidence and lodge the tribunal’s or court’s form yourself.

Step 6: Enforcing the Tribunal Order

If the tribunal rules in your favour and the client still doesn’t pay, you’ll need to enforce the order. Options typically include:

• Garnishee order: Directs the client’s bank to pay you from their account
• Warrant for seizure and sale: Allows a sheriff to seize and sell the client’s assets
• Examination summons: Requires the client to attend court and disclose their financial position under oath

Enforcement is handled through the relevant court registry. Fees apply, but they’re usually recoverable from the debtor.

How Claim Done Helps

Claim Done generates the documents you need to recover unpaid invoices without paying hourly legal fees.

Letter of Demand — $49 Tell us about your invoice and evidence. The system drafts a formal Letter of Demand and delivers it by email.

Statutory Demand — $97 For company debtors owing $4,000+. Claim Done prepares the statutory demand and supporting affidavit template.

Tribunal Application — $97 Complete the intake form. The system drafts your application (for a New South Wales debt, a Local Court statement of claim) and a witness statement. You attach your own evidence and lodge the tribunal’s or court’s form yourself.

Flat fees. No subscription. Done in about 5 minutes.

Generate a Letter of Demand now and get your unpaid invoice moving.

Final Thoughts

When a client refuses to pay after you’ve finished the work, start with polite reminders, escalate to a formal Letter of Demand, and if necessary, file a tribunal application or statutory demand.

A properly drafted Letter of Demand is often enough — it signals you know your rights and you’re prepared to enforce them.

Don’t let unpaid invoices sit. The longer you wait, the harder it becomes to recover the money.

Frequently Asked Questions

How long should I wait before sending a Letter of Demand?

Send a Letter of Demand 15-30 days after the original invoice due date, once you’ve tried at least two polite reminders. Taking action early shows you’re serious and increases your chances of getting paid.

Can I charge interest on an overdue invoice in Australia?

Yes, if your contract or terms of trade include an interest clause. Without one, you can still ask the court for interest up to judgment, for example under s 100 of the Civil Procedure Act 2005 (NSW) for claims of $1,000 or more.

What if the client claims the work was defective?

If the client raises a genuine dispute about the quality of your work, a statutory demand or tribunal application may not succeed. You’ll need to provide evidence that the work met the agreed standard.

Do I need a lawyer to file a tribunal application?

No. Australian tribunals are designed to be accessible without legal representation. You can file and present your case yourself. Claim Done drafts your application and a witness statement; you attach your evidence, lodge the tribunal’s or court’s form yourself and attend the hearing.

What happens if I win at tribunal but the client still doesn't pay?

You can enforce the tribunal order through garnishee orders, warrants for seizure and sale, or examination summons. These are handled through the court registry. Enforcement fees apply but are usually recoverable from the debtor.