Last updated 2 October 2026 · Reviewed by the Claim Done team · Not legal advice

What to Do After Sending a Letter of Demand in Australia

You have sent your letter of demand. Now what? There are three possible outcomes — and a specific strategy for each.

Scenario 1: They pay

Some people pay once they receive a formal letter of demand. If payment arrives:

• Confirm receipt of the payment in writing (email is fine)
• If the amount is a partial payment or settlement, get written confirmation that it is accepted in full and final satisfaction of the debt
• Keep all records — the correspondence, the letter, the bank statement showing payment

No further action is needed. The matter is resolved.

Scenario 2: They respond or negotiate

The recipient may respond disputing the debt, offering a partial payment, or requesting more time. How to handle it:

• If they dispute the debt: review their response carefully. If you have strong evidence, reply in writing restating your position and giving a final deadline.
• If they offer a lower amount: you can accept or counter. Any settlement must be documented — get it in writing before you accept payment.
• If they request more time: you can agree to an extension, but confirm it in writing and be specific about the new deadline.

All responses should be in writing. Verbal agreements are difficult to enforce.

Scenario 3: They ignore the deadline

If the 14-day deadline passes with no payment and no response, you have several escalation options depending on who owes you money:

For individuals and sole traders

File a claim with the relevant tribunal or court:

• Local Court (New South Wales) — business and private debts up to $100,000 (NCAT hears consumer claims only)
• VCAT (Victoria) — goods and services disputes
• QCAT (Queensland) — claims up to $25,000
• Magistrates Court (Western Australia, South Australia, Tasmania), ACAT (Australian Capital Territory), NTCAT (Northern Territory) — state-specific limits

Claim Done prepares a complete tribunal application for $97. Your letter of demand and their non-response become key evidence.

For companies (Pty Ltd, Ltd)

If the debt is $4,000 or more and not genuinely disputed, consider escalating to a statutory demand under s459E of the Corporations Act. This gives the company 21 days to pay or face wind-up proceedings. Claim Done prepares statutory demands for $97.

For larger claims

For claims above the tribunal limits, or for more complex matters, you may need to file in the Local Court or Magistrates Court (under $100,000 in most states) or the District Court (larger claims).

What evidence to gather

Whether you go to a tribunal or court, you will need:

• A copy of your letter of demand and proof it was sent (email sent folder, read receipt, registered post tracking)
• The contract, invoice, or agreement underlying the debt
• Any communications showing the debt was acknowledged
• Evidence of the loss (receipts, quotes for repairs, bank statements)

The bottom line

A letter of demand is not the end of the road — it is the beginning of the formal process. For those that do not, Claim Done can prepare your tribunal application, statutory demand, or full case bundle. See all services.

Timeline: what to expect after sending a demand

What if they acknowledge the debt but cannot pay immediately?

Consider accepting a payment plan — but only in writing. A signed letter confirming the agreed payment schedule creates a new enforceable contract. If they default on the plan, you can file immediately without sending a new demand.

What if they dispute the amount?

If they accept partial liability but dispute the full amount, consider whether the undisputed portion is worth settling for. If you believe the full amount is owed, proceed to tribunal — where a member will hear both sides and determine the correct amount.

Do I need a lawyer to go to tribunal?

No. Legal representation is either prohibited or requires leave of the tribunal in most Australian small claims divisions. Claim Done drafts your tribunal application and witness statement from your answers, for you to lodge and present yourself.

Start your tribunal application — from $97