How Long to Pay After Final Demand Australia | ClaimDone

You sent a final demand. The deadline is approaching or has passed. Now what?

This guide explains how long someone has to pay after receiving a final demand in Australia, what happens when they ignore it, and the practical steps you can take next.

What is a final demand?

A final demand is the last formal request for payment before you escalate to legal action. It follows an initial letter of demand that was ignored or only partially addressed.

The purpose: give the debtor one last chance to pay before you file a tribunal application, engage a debt collector, or pursue other enforcement options.

Unlike the first demand, a final demand makes it clear you are prepared to take the next step. It is documented warning that the matter will proceed if payment is not received by the specified date.

How long does someone have to pay after a final demand?

There is no fixed legal timeframe. The deadline is whatever you specify in the letter.

Most final demands give 7 days from the date of receipt. This is standard because:

• It creates urgency without appearing aggressive
• It gives the debtor time to arrange payment or seek advice
• Tribunals generally view it as reasonable

Some senders use 14 days if the debt is large, the debtor is interstate, or there are complicating factors.

3 days or 48 hours is occasionally used when the matter is urgent, but this can weaken your position in a tribunal. A tribunal member may view an unreasonably short deadline as evidence you were not genuinely trying to resolve the matter.

Your letter should state:

• The exact amount owed
• The payment deadline (date and time, e.g., “5:00 PM on 15 May 2025”)
• The payment method
• What will happen if payment is not received

What happens after the deadline passes?

If the debtor does not pay by the deadline, you have several options. The right one depends on the debt amount, the debtor’s circumstances, and how much time and money you are willing to invest.

File a tribunal application

If the debt is under the tribunal threshold in your state (typically $10,000–$25,000), you can lodge an application with the relevant civil tribunal. Tribunals are designed to be accessible without a lawyer.

You file the application, pay the filing fee (typically $50–$300), and attend a hearing. If you win, the tribunal issues an order requiring the debtor to pay.

The final demand is critical evidence. It proves you gave the debtor notice and an opportunity to pay before escalating.

Engage a debt collector

Debt collectors work on commission (typically 10–25% of the recovered amount) or a flat fee. They contact the debtor on your behalf, negotiate payment plans, and escalate to legal action if necessary.

This option works well if the debt is under $5,000 and not worth your time to chase, or if the debtor is avoiding you but may respond to a third party.

Serve a statutory demand (companies only)

If the debtor is a registered company and owes $4,000 or more, you can serve a statutory demand under the Corporations Act. This gives the company 21 days to pay or apply to set aside the demand. If they do neither, you can apply to wind up the company.

This is a powerful tool, but it must be done correctly. The demand must be in the prescribed form and supported by an affidavit.

Issue a court claim

If the debt exceeds the tribunal threshold, you will need to file a claim in the Magistrates Court, District Court, or Supreme Court (depending on the amount and state).

This is more formal, more expensive, and usually requires a lawyer. The final demand is still essential evidence that you attempted to resolve the matter before filing.

Write off the debt

Sometimes the debtor has no money, no assets, and no realistic prospect of paying. Pursuing them may cost more than the debt is worth.

In these cases, writing off the debt is the practical choice. You can still report the matter to a credit reporting agency if the debt meets the reporting threshold.

Does the debtor have to respond to the final demand?

No. There is no legal obligation to respond to a letter of demand or a final demand unless it is a statutory demand served under the Corporations Act.

However, ignoring a final demand has consequences:

• It strengthens your case if you file a tribunal application or court claim
• It may result in a default judgment if they do not defend the claim
• It demonstrates bad faith, which tribunals and courts consider

If the debtor genuinely disputes the debt, they should respond in writing, explain the dispute, and provide evidence. Silence is not a defence.

What if the debtor offers to pay in instalments?

If the debtor cannot pay the full amount immediately but offers a payment plan, you have three choices:

1. Accept the offer — get it in writing using a formal payment plan agreement
2. Counter-offer — propose different terms (higher payments, shorter timeframe, interest)
3. Reject the offer — proceed with enforcement action

If you accept a payment plan, document it. A verbal agreement is not enforceable. Use a written payment plan agreement that specifies:

• The total amount owed
• The payment schedule
• The payment method
• What happens if they miss a payment
• Whether interest applies

If they default on the plan, you can still file a tribunal application or take other enforcement action.

How ClaimDone helps with final demands

ClaimDone generates a professionally formatted final demand letter in under 60 minutes. You complete a short intake form, upload your evidence, and our Proprietary AI Engine drafts the letter.

The letter is delivered automatically to the debtor by email and registered post, with proof of delivery tracked in your dashboard.

If the debtor ignores the final demand, ClaimDone can also prepare your tribunal application, statutory demand, or debt recovery documents — all at fixed flat fees with no subscription.

What to do if the deadline passes and they still have not paid

1. Check your records — confirm the final demand was delivered and the deadline has passed
2. Decide your next step — tribunal, debt collector, statutory demand, or court claim
3. Act quickly — delays weaken your case and may allow limitation periods to expire
4. Keep all evidence — save copies of the final demand, proof of delivery, and any correspondence
5. Get help if needed — if the debt is large, complex, or disputed, consult a lawyer or use ClaimDone to prepare the next document

The final demand is not the end. It is the last step before enforcement. If the debtor ignores it, you must follow through.

Get your final demand prepared now

A final demand only works if you are prepared to escalate. If the debtor has ignored your deadline, ClaimDone can prepare your final demand or next enforcement document for a flat fee of $79 — no subscription, done in 60 minutes.

Start your final demand now →

Frequently Asked Questions

Can I give someone less than 7 days to pay after a final demand?

Yes, but it may weaken your position if the matter goes to a tribunal. A very short deadline (e.g., 48 hours) can appear unreasonable and suggest you were not genuinely trying to resolve the matter. Seven days is standard and widely accepted as reasonable.

What happens if the debtor ignores the final demand completely?

If they ignore it, you can file a tribunal application, engage a debt collector, serve a statutory demand (if they are a company owing $4,000+), or issue a court claim. The final demand is evidence that you gave them notice and an opportunity to pay before escalating.

Do I have to send a final demand before going to tribunal?

No, but it is strongly recommended. Tribunals expect you to attempt to resolve the matter before filing. A final demand proves you gave the debtor a chance to pay. Without it, the tribunal may adjourn the hearing and require you to send one first.

Can the debtor negotiate after receiving a final demand?

Yes. If they contact you before the deadline and offer a payment plan or partial payment, you can negotiate. Get any agreement in writing using a payment plan agreement. If they default on the plan, you can still pursue enforcement action.

What if the debtor claims they never received the final demand?

This is why proof of delivery matters. Send the final demand by registered post or email with read receipts. If they claim they did not receive it, you can provide tracking records or email logs as evidence. ClaimDone automatically tracks delivery and provides proof in your dashboard.