Debtor Ignored Your Letter of Demand: What to Do Next in Australia

You sent a letter of demand. The debtor received it. They read it. And they did nothing.

Australian law gives you a clear escalation path from that first letter through to tribunal proceedings. Knowing the exact steps keeps you in control.

Why debtors ignore letters of demand

Understanding why helps you choose the right next move:

• They dispute the debt — genuinely believe they do not owe the money
• They cannot pay right now — cash flow problems, business struggling, personal hardship
• They are hoping you will give up — testing whether you are serious
• They never received it — incorrect address, moved premises, mail not forwarded
• They are getting legal advice — waiting to respond through a solicitor

If they dispute the debt, you might need more evidence. If they cannot pay, a payment plan could work better than court. If they are ignoring you hoping you will go away, escalation is the correct response.

Confirm they received the letter

Before escalating, confirm delivery:

• Registered post tracking — check Australia Post tracking for delivery confirmation
• Email read receipts — if sent by email, check whether it was opened
• Follow-up call — ask “did you receive my letter?”
• Check the address — verify you sent it to their current registered business or home address

If they did not receive it, resend via registered post with tracking. If they did receive it and are ignoring it, move to the next step.

Send a final demand

A final demand is the last warning before formal legal action. It is shorter, sharper, and includes a specific deadline.

What a final demand includes:

• Reference to your original letter and the date it was sent
• Confirmation the debt remains unpaid
• A final deadline — typically 7 to 14 days from the date of the final demand
• Clear statement you will commence tribunal proceedings if they do not pay
• Updated total including any additional interest or costs

Timing: Send the final demand at least 14 days after your original letter. This gives the debtor reasonable time to respond before you escalate.

Tone: Firmer than the first letter. You are not negotiating — you are informing them of the consequences.

Claim Done prepares and sends final demands for $49, delivering by email.

Lodge a tribunal or court claim

If the final demand is also ignored, start a claim in the tribunal or court that hears money claims in your state. Some states use a civil tribunal and others use the Magistrates Court or Local Court, each with its own limits (see the list below). In New South Wales, a business owed money has a debt claim for the Local Court of New South Wales, not NCAT: NCAT hears consumer claims, which are brought by the consumer.

Which tribunal or court:

• New South Wales: Local Court of New South Wales, not NCAT (NCAT hears consumer claims, which are brought by the consumer). Small Claims Division up to $20,000; General Division over $20,000 up to $100,000
• 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
• Australian Capital Territory: ACT Civil and Administrative Tribunal (ACAT), civil disputes up to $25,000
• Tasmania: Magistrates Court of Tasmania (Civil Division), claims up to $50,000
• Northern Territory: Northern Territory Civil and Administrative Tribunal (NTCAT), small claims up to $25,000

Application process:

1. Complete the application form for your state’s tribunal or court (in New South Wales, a statement of claim)
2. Attach supporting evidence — invoices, contracts, correspondence, proof of delivery
3. Pay the filing fee: filing fees change each 1 July; check the current fee on the tribunal’s or court’s website before you file
4. Serve the application on the debtor — the tribunal or court provides instructions
5. Attend the hearing

What happens at the hearing:

Tribunals and small claims courts are designed for self-represented parties. You present your evidence, the debtor presents theirs, and the tribunal or court makes a decision.

If you win, the tribunal or court issues an order requiring payment. If they still do not pay, you can enforce through wage garnishment, bank account seizure, or property charge.

Timing: How long does escalation take?

Timeline from first letter to tribunal or court order:

• Letter of demand: Day 0 — sent via registered post
• Wait period: 14 to 21 days for response
• Final demand: Day 21 — sent if no response
• Wait period: 7 to 14 days for response
• Tribunal or court claim: Day 35 — lodge if still no payment
• Hearing date: set by the tribunal or court
• Order issued: at or after the hearing
• Enforcement: if the debtor still does not pay

Total time from first letter to enforceable order: depends on the tribunal’s or court’s list in your state.

When to skip straight to tribunal

You can skip the final demand and go straight to tribunal if:

• The debt is very old — you have already sent multiple letters over many months
• The debtor has explicitly refused to pay — they have told you in writing they will not pay
• The debtor is insolvent or about to close down — waiting longer risks them disappearing
• The amount is time-sensitive — for example, a limitation period is approaching

Most tribunals expect you to make a reasonable attempt to resolve the dispute before filing. Sending at least one letter of demand demonstrates good faith.

What if the debtor is a company?

If the debtor is a registered company (Pty Ltd or Ltd) and owes $4,000 or more, you have an additional option: a statutory demand.

A statutory demand is more powerful than a tribunal application because:

• It gives the company only 21 days to pay or apply to set aside the demand
• If they do not comply, you can apply to wind up the company
• It appears on credit reports and ASIC searches, damaging their reputation
• It forces directors to take the debt seriously or risk personal liability

Claim Done prepares statutory demands (Form 509H) and the supporting affidavit for $97. This is often more effective than a tribunal application for company debtors.

Costs: What does escalation cost?

What you can expect to pay at each stage:

• Letter of demand: flat fee (Claim Done)
• Final demand: flat fee (Claim Done)
• Tribunal or court claim: filing fees change each 1 July; check the current fee on the tribunal’s or court’s website before you file
• Statutory demand: $97 (Claim Done)
• Enforcement after a tribunal or court order: court fees apply, depending on method

What if they respond but refuse to pay in full?

Sometimes a debtor will respond but offer less than the full amount, or ask for a payment plan.

Evaluate the offer:

• Is it reasonable given their financial situation?
• Will accepting it avoid the time and cost of tribunal proceedings?
• Can you afford to wait for instalments, or do you need the money now?

If you accept a payment plan, document it properly. Claim Done prepares payment plan agreements for $49, including default clauses that allow you to take immediate tribunal action if they miss a payment.

If their offer is unreasonably low or they are clearly stalling, proceed with the tribunal application.

How Claim Done helps with debt recovery escalation

Claim Done automates the entire escalation path:

1. Letter of demand — drafted, citing applicable law, sent by email ($49)
2. Final demand — prepared and sent if the debtor ignores the first letter ($49)
3. Tribunal application — your application (a Local Court statement of claim for a New South Wales debt) and a witness statement, for you to lodge with your state’s tribunal or court ($97)
4. Statutory demand — Form 509H and affidavit prepared for company debtors ($97)
5. Payment plan agreement — if you negotiate a settlement, document it properly ($49)

Each service is a flat fee with no subscription. You tell us once what evidence you have, and Claim Done’s Programmatic Algorithms use it to generate the correct document for your situation.

Ready to escalate your debt recovery?

If your debtor ignored your letter of demand, Claim Done prepares your final demand in about 5 minutes for $49. Tell us what evidence you have, answer a few questions, and we will generate and send it by email.

Start your final demand now — $49 flat fee, no subscription, Australia-wide.

Frequently Asked Questions

How long should I wait before sending a final demand after the first letter of demand?

Wait at least 14 days after sending your first letter of demand. This gives the debtor reasonable time to respond or arrange payment. If you sent the letter via registered post, check the tracking to confirm delivery before counting the 14 days.

Can I go straight to tribunal without sending a final demand?

Yes, but most tribunals expect you to make a reasonable attempt to resolve the dispute first. Sending at least one letter of demand demonstrates good faith. You can skip the final demand if the debtor has explicitly refused to pay in writing, or if the debt is very old and you have already sent multiple letters.

What if the debtor disputes the debt after receiving my final demand?

If they raise a genuine dispute, you may need to provide additional evidence or negotiate. If the dispute is clearly a stalling tactic with no merit, proceed with your tribunal application. Tribunals are designed to resolve disputed debts, so a dispute does not prevent you from filing — it just means the hearing will focus on whether the debt is valid.

How much does it cost to lodge a tribunal application in Australia?

Filing fees vary by state, forum and claim amount, and they change each 1 July; check the current fee on the tribunal’s or court’s website before you file. In New South Wales, a debt claim is filed in the Local Court, not NCAT.

What happens if I win at tribunal but the debtor still does not pay?

If the debtor ignores a tribunal order, you can enforce it through wage garnishment, bank account seizure, or registering a charge over their property. Enforcement is done through the court system in your state, and there are additional fees.