Unpaid Invoice Over 12 Months Old? Recovery Options in Australia

The invoice has been sitting on your debtor ledger for more than a year. Maybe two. Each quarter you flag it, each quarter you do nothing about it, each quarter the chance of recovery feels a little more imaginary. Eventually most businesses just write it off — usually long before they actually had to.

An invoice over 12 months old is not a write-off. In every Australian jurisdiction, simple contract debts have a limitation period of six years from the date the cause of action accrued (typically the date payment fell due). You have a long runway — but the older the debt, the harder the recovery, and the more important it is to take a formal step that resets the conversation.

Why aged debts get harder, and why they still recover

Three things compound over time. The debtor’s records get thinner, so disputes become easier to assert and harder to refute. Your evidence gets harder to assemble. And the debtor convinces themselves you are never coming. The good news is that the third factor cuts both ways — when a formal demand finally lands, the shock value is significantly higher than it would have been at 60 days. Debtors who have spent a year assuming the debt was forgotten react sharply when the formal letter arrives.

The legal step that restarts the clock

A Letter of Demand on an aged debt does what no further reminder will do — it formally re-asserts the debt, attaches updated interest, and signals that proceedings are imminent. Crucially, where a debtor acknowledges the debt in writing in response (even partially, even by offering a payment plan), the limitation clock can reset, giving you a fresh six years to enforce.

What Claim Done delivers

• Full debt history reconstructed and presented cleanly
• Updated quantum including any contractual or statutory interest
• Citation of contract and applicable statute (including the Limitation Act in your state)
• Clear 14-day deadline and named next-step mechanism
• Drafted and sent as a PDF, flat $49

Common pushbacks on aged debts and why they fail

• “It is too old to chase.” Six years is the standard limitation period for a simple contract debt in Australia. A 12 to 18 month debt is well inside it.
• “You waived it by waiting.” Mere delay is not waiver. Waiver requires a clear, unequivocal communication that the debt would not be pursued.
• “We never agreed to that invoice.” Late-raised disputes carry little weight, particularly where the work was accepted and used.
• “We have no records.” The debtor’s record-keeping is their problem, not yours. Your contemporaneous records carry the day.

Next escalation if the demand is ignored

The escalation path on an aged debt is the same as on a fresh one — Final Demand ($49), then small claims tribunal (VCAT, QCAT and state equivalents) for amounts under the relevant cap, Magistrates Court for mid-size debts, or a Statutory Demand under section 459E of the Corporations Act 2001 for corporate debtors over $4,000. In New South Wales a business’s unpaid invoice goes to the Local Court of New South Wales, not NCAT: the Small Claims Division up to $20,000 and the General Division over $20,000 up to $100,000. The age of the debt does not weaken any of these tools, provided you stay inside the limitation period. Acting now — even on a 12 or 18 month old invoice — preserves the full set of remedies and keeps the clock running on your side, not the debtor’s.