Unpaid Invoice from a Company That’s Still Trading: What’s Your Best Move?

You’ve done the work. You’ve sent the invoice. You’ve followed up politely. The company is still trading, still posting on social media, still taking on new clients — but they’re not paying you.

This is a decision, not a cash flow problem. Here’s how to force payment without wasting time or money.

The Three Escalation Paths for an Unpaid Invoice

When a registered company owes you money, you have three main options:

1. Letter of demand — the first formal step, delivered by email by Claim Done
2. Statutory demand — the nuclear option for debts over $4,000
3. Tribunal application — for smaller debts or when you want a judgment on the record

Using the wrong one wastes time. Using the right one gets you paid.

Start With a Letter of Demand

Before you escalate to a statutory demand or tribunal, send a letter of demand. This is the cheapest, fastest, and most effective first step for any unpaid invoice.

A letter of demand:

• Formally requests payment within a specified timeframe (typically 7–14 days)
• Cites the applicable Australian law
• Warns of further legal action if the debt is not paid
• Creates a paper trail showing you attempted to resolve the matter before escalating

It signals you’re serious, organised, and prepared to take further action.

Claim Done generates and sends your letter of demand by email for $49. You tell us about your invoice, contract, and any correspondence. Our Programmatic Algorithms draft a letter citing the applicable law and deliver it to the company by email.

If the company ignores the letter, you escalate.

When to Use a Statutory Demand

A statutory demand is the most powerful debt recovery tool in Australia — but it only works in specific circumstances.

Requirements for a Valid Statutory Demand

You can issue a statutory demand if:

• The debtor is a registered company (Pty Ltd or Ltd) — check the ASIC register
• The debt is $4,000 or more — this is the statutory threshold
• The debt is a liquidated sum — a specific, ascertained amount, not estimated damages
• The debt is undisputed — the company has not raised a genuine dispute about the amount owed

If all four conditions are met, a statutory demand gives the company 21 days to pay or face wind-up proceedings.

What Happens After You Serve a Statutory Demand

Once the company is served with the prescribed form and supporting affidavit:

• They have 21 days to pay the debt in full
• Or apply to set aside the demand if they can prove a genuine dispute or offsetting claim
• If they do neither, you can apply to wind up the company

This is not a bluff. If the company ignores a valid statutory demand, you can file a wind-up application in the Federal Court or Supreme Court. The company will be placed into liquidation unless they pay immediately or prove solvency.

The alternative is public insolvency proceedings, which destroy their credit rating and reputation.

When NOT to Use a Statutory Demand

Do not use a statutory demand if:

• The debt is under $4,000 — use a tribunal application instead
• The debtor is an individual or sole trader — statutory demands only apply to registered companies
• The company has raised a genuine dispute about the invoice — they can set aside the demand
• You are not prepared to follow through with wind-up proceedings if they ignore it

A statutory demand is a formal step toward liquidation. If you issue one, be ready to act.

Claim Done prepares the prescribed statutory demand form and supporting affidavit template for $97. You provide the debt details, and our Programmatic Algorithms generate the documents ready for swearing and service.

When to Use a Tribunal Application

If the debt is under $4,000, or you want a judgment on the record, file a tribunal application.

Each state has a tribunal or court that handles small business debt disputes:

• New South Wales: Local Court (Small Claims Division up to $20,000; General Division up to $100,000)
• Victoria: Victorian Civil and Administrative Tribunal (VCAT)
• Queensland: Queensland Civil and Administrative Tribunal (QCAT)
• Western Australia: Magistrates Court (minor case)
• South Australia: Magistrates Court (Minor Civil)
• Tasmania: Magistrates Court (minor civil claim up to $15,000)
• Australian Capital Territory: ACT Civil and Administrative Tribunal (ACAT)
• Northern Territory: Northern Territory Civil and Administrative Tribunal (NTCAT)

Tribunal applications are cheaper and faster than court. You do not need a lawyer. The filing fee is typically $50–$200 depending on the claim amount.

Advantages of a Tribunal Application

• Works for any debtor — individual, sole trader, partnership, or company
• Lower threshold — most tribunals hear claims from $500 to $25,000
• Waiting times vary by tribunal; check its website
• You get a legally enforceable judgment

Once you have a tribunal order, you can enforce it through wage garnishment, bank account seizure, or sheriff’s sale of assets.

Claim Done prepares your tribunal application for $97. You tell us what evidence you have, and our Programmatic Algorithms draft your application (for a New South Wales debt, a Local Court statement of claim) and a witness statement.

Which Option is Right for You?

Here’s a quick decision tree:

If the company is insolvent or about to fold, a statutory demand accelerates the process. If they’re trading normally and just refusing to pay, the threat of wind-up proceedings is usually enough.

If the debt is under $4,000, skip the statutory demand and go straight to the tribunal. You’ll get a judgment faster and cheaper.

What Not to Do

Do not:

• Wait indefinitely hoping they’ll pay — debts get harder to recover over time
• Send vague, emotional emails — they will be ignored
• Threaten legal action you’re not prepared to take — it weakens your position
• Use a statutory demand for a debt under $4,000 — it’s invalid and they’ll ignore it
• Issue a statutory demand if the company has raised a genuine dispute — they’ll set it aside

How Claim Done Helps

Claim Done generates the exact document you need based on the evidence you describe:

• Letter of demand — drafted, formatted, and sent by email
• Statutory demand — prescribed form and affidavit template prepared for $97
• Tribunal application — full application pack prepared

No subscription. No hourly billing. No waiting weeks for a lawyer to draft a letter.

You complete a 5-minute intake form. You tell us about your invoice, contract, and correspondence. Our Programmatic Algorithms draft the document citing the applicable Australian law. You review, approve, and it’s delivered or prepared for filing.

For straightforward unpaid invoices, the platform handles it.

Get Your Unpaid Invoice Paid

An unpaid invoice from a company still trading is not a lost cause. It’s a decision point.

If the debt is under $4,000, send a letter of demand and file a tribunal application if they ignore it. If the debt is over $4,000 and the debtor is a registered company, send a letter of demand and follow up with a statutory demand if they still refuse to pay.

The ones that don’t pay after a statutory demand are usually insolvent — and you’ve just forced them to deal with it publicly.

Start your statutory demand with Claim Done and give the company 21 days to pay or face wind-up proceedings.

Frequently Asked Questions

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

No. The statutory minimum threshold is $4,000. If your debt is under that amount, use a tribunal application instead.

What happens if the company disputes the debt after I serve a statutory demand?

They can apply to set aside the demand within 21 days if they can prove a genuine dispute or offsetting claim. If the court agrees, the demand is set aside and you’ll need to prove the debt in tribunal or court.

Can I use a statutory demand against a sole trader or individual?

No. Statutory demands only apply to registered companies (Pty Ltd or Ltd). For individuals or sole traders, use a letter of demand followed by a tribunal application or court claim.

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

21 days from the date of service. They must either pay the debt in full or apply to set aside the demand. If they do neither, you can apply to wind up the company.

Is a letter of demand legally required before issuing a statutory demand?

No, but it’s strongly recommended. A letter of demand gives the company a chance to pay before you escalate to formal insolvency proceedings.