How to Recover Unpaid Invoices from a Company Still Trading

You delivered the work. You sent the invoice. The company is still operating, posting on social media, taking on new clients — but your payment never arrives.

When you are owed money by a registered company that is clearly solvent and still trading, Australian law gives creditors specific tools to recover those debts. The most powerful is the statutory demand under the Corporations Act.

Why companies ignore invoices even when they can pay

Solvent companies delay payment for several reasons:

• Cash flow management — they use your money as free working capital while prioritising other creditors
• Dispute tactics — they manufacture minor complaints to justify withholding the full amount
• Administrative neglect — your invoice sits in an approval queue while the company focuses on bigger clients
• Testing boundaries — they see if you will chase payment or just write it off

The common thread: they believe there are no real consequences. Your job is to prove them wrong.

The escalation path for company debts

Recovering unpaid invoices from a company follows a clear sequence. Each step increases pressure and cost for the debtor.

Step 1: Letter of demand

Start with a formal letter of demand. This is not a polite reminder. It is a legal document that:

• States the exact amount owed, including invoice numbers and dates
• Cites the contract, purchase order, or terms that created the debt
• Gives a specific deadline for payment (typically 7-14 days)
• States the consequences if payment is not received

A properly drafted letter of demand resolves most company debts. The company’s accountant or legal team sees it, realises you are serious, and processes the payment.

ClaimDone generates and sends a letter of demand automatically for $97. You complete a 5-minute form, upload your invoice and supporting evidence, and the AI drafts a letter citing the applicable law. It gets delivered to the company’s registered office by email and post.

Step 2: Final demand

If the company ignores your first letter, send a final demand:

• Confirms the debt remains unpaid
• States that you will commence tribunal proceedings or issue a statutory demand if payment is not received within 7 days
• Adds any interest or late fees permitted under your contract

The final demand is your last attempt at resolution before formal legal action.

Step 3: Tribunal application or statutory demand

If the company still refuses to pay, you have two options depending on the debt size.

For debts under $10,000 (or up to $25,000 in some states): File a claim in your state’s civil tribunal. The process is designed for self-representation, the filing fee is low, and you can claim interest and costs. The company must either pay, defend the claim, or risk a default judgment.

For debts of $4,000 or more: Issue a statutory demand. This is the nuclear option.

What is a statutory demand and why it works

A statutory demand is a formal notice served on a company under the Corporations Act. It states that the company owes you a specific debt of at least $4,000, and it has 21 days to either:

• Pay the debt in full, or
• Apply to the court to set aside the demand

If the company does neither, it is presumed to be insolvent. You can then apply to wind up the company — force it into liquidation — even if it is otherwise solvent and trading profitably.

This is not a bluff. Courts have wound up profitable companies for failing to respond to valid statutory demands. The company’s directors know this. Their lawyers and accountants definitely know this.

Why statutory demands are so effective

The threat of liquidation is existential for a company. If the company is wound up:

• Directors lose control of the business
• A liquidator is appointed to sell all assets
• The company is deregistered and ceases to exist
• Directors may face personal liability if they traded while insolvent

Even if the company is solvent and could easily pay the debt, the cost and reputational damage of defending a wind-up application far exceeds the cost of simply paying what they owe.

Most companies pay within days of receiving a statutory demand. The rest pay within the 21-day deadline.

Requirements for a valid statutory demand

You cannot issue a statutory demand unless:

• The debt is at least $4,000 (the statutory threshold)
• The debtor is a registered company (Pty Ltd or Ltd) — not a sole trader or partnership
• The debt is a liquidated sum — a specific, ascertained amount, not estimated damages
• The debt is not genuinely disputed — the company cannot raise a legitimate defence

If the company genuinely disputes the debt (for example, they claim the work was defective), a statutory demand is not appropriate. The company can apply to set it aside, and you may be ordered to pay their legal costs.

Only use a statutory demand for clear, undisputed debts where the company is simply refusing to pay.

How to serve a statutory demand

A statutory demand must be served in accordance with the Corporations Act and Regulations:

1. Prepare the prescribed form — the statutory demand document
2. Prepare a supporting affidavit — sworn before a Justice of the Peace or solicitor, verifying the debt and confirming it is not disputed
3. Serve the demand — deliver it to the company’s registered office (check the ASIC register for the current address)
4. Wait 21 days — the company has 21 days from service to pay or apply to set aside the demand

If the company does not respond within 21 days, you can file a wind-up application in the Federal Court or Supreme Court.

ClaimDone prepares the statutory demand and supporting affidavit template for $197. You provide the debt details, upload your invoice and evidence, and the AI generates both documents ready for you to sign and serve. The process takes about 60 minutes.

When to use a tribunal claim instead

Statutory demands are powerful, but they are not always the right tool. Use a tribunal claim if:

• The debt is under $4,000 (below the statutory demand threshold)
• The debt is genuinely disputed and you need a hearing to prove your case
• You want a judgment you can enforce against the company’s assets
• The company is a sole trader or partnership (statutory demands only apply to registered companies)

Tribunals are faster and cheaper than superior courts, and you do not need a lawyer. You file your claim, attend a short hearing, and the tribunal makes a binding decision. If you win, you can enforce the judgment by seizing the company’s bank accounts, equipment, or other assets.

ClaimDone prepares tribunal applications for all Australian states and territories. You complete the intake form, upload your evidence, and the AI generates the application and supporting documents ready to file.

What happens if the company still does not pay

If you obtain a tribunal judgment or the company ignores your statutory demand, you can enforce the debt through:

• Garnishee orders — seize money from the company’s bank accounts
• Seizure and sale — send a sheriff to seize and sell the company’s equipment, stock, or vehicles
• Wind-up application — if you served a statutory demand and the 21 days have passed, apply to liquidate the company

Enforcement is a separate process with its own costs and procedures, but once you have a judgment or an unanswered statutory demand, you have the legal power to force payment.

How Claim Done helps you recover unpaid company debts

ClaimDone generates the legal documents you need to recover unpaid invoices from companies that are still trading:

• Letter of demand — $97, drafted by AI citing the applicable law, sent automatically to the company’s registered office
• Statutory demand + affidavit — $197, prepared in 60 minutes for debts of $4,000 or more
• Tribunal application — state-specific claim forms and supporting documents for disputed debts under the tribunal limit

You complete a short intake form, upload your invoice and evidence, and ClaimDone’s Proprietary AI Engine generates the documents in plain, legally precise language. No subscription. No hourly billing. Flat fees, Australia-wide.

For complex disputes, high-value claims, or if the company has already filed for liquidation, consult a qualified Australian lawyer. Claim Done is designed for straightforward debt recovery where you have clear evidence and the company is simply refusing to pay.

Final checklist before you escalate

Before you issue a statutory demand or file a tribunal claim, confirm:

• You have sent at least one formal letter of demand
• The debt is for a specific, undisputed amount
• You have copies of the invoice, contract, and any correspondence
• The company is still registered and trading (check the ASIC register)
• You are within the limitation period (typically 6 years from the date the debt became due)

If all of those are true, you have a strong case.

Start recovering your unpaid invoices today. Choose the service that matches your situation — letter of demand for first contact, statutory demand for company debts over $4,000, or tribunal application for disputed claims. Complete the intake form and let Claim Done handle the legal drafting.

Frequently Asked Questions

Can I issue a statutory demand for a debt under $4,000?

No. The Corporations Act sets the minimum threshold at $4,000. For debts below that amount, file a claim in your state’s civil tribunal instead.

What if the company claims the work was defective?

If the company raises a genuine dispute about the quality of your work, a statutory demand is not appropriate. They can apply to set it aside, and you may be ordered to pay their legal costs. Use a tribunal claim to resolve disputed debts.

How long does a company have to respond to a statutory demand?

21 days from the date of service. If the company does not pay or apply to set aside the demand within that time, it is presumed to be insolvent and you can apply to wind it up.

Can I use a statutory demand against a sole trader?

No. Statutory demands only apply to registered companies (Pty Ltd or Ltd). For sole traders and partnerships, use a letter of demand followed by a tribunal claim if they do not pay.

What happens if the company ignores my letter of demand?

Send a final demand, then escalate to either a tribunal claim (for debts under the tribunal limit) or a statutory demand (for company debts of $4,000 or more). Most companies pay once they see you are serious about enforcement.