Unpaid Invoice Over 90 Days New South Wales: Your Legal Options

You sent the invoice. You sent a reminder. You called. You emailed. It’s been over 90 days, and you still haven’t been paid. If you’re a New South Wales small business owner, contractor, or freelancer, you have clear legal options to recover what you’re owed. Because you are the business that is owed money, this is a debt claim for the Local Court of New South Wales, not NCAT.

This guide explains the debt recovery pathway when an invoice has been unpaid for 90 days or more in New South Wales, from demand letters to a statement of claim in the Local Court.

Why 90 Days Matters

There’s no magic threshold at 90 days, but it’s a practical marker. Most payment terms are 7, 14, or 30 days. By 90 days overdue, you’ve likely sent reminders, made calls, and exhausted goodwill.

This timeline gives you evidence of:

• Reasonable opportunity to pay
• Pattern of avoidance
• Serious intent to recover

This strengthens your position if you need to file a claim in the Local Court or defend against a counterclaim.

Step 1: Send a Letter of Demand

A letter of demand is the formal first step in debt recovery. It’s a written notice that states the amount owed, refers to the invoice and any contract, and gives a deadline (typically 7-14 days) before you commence court proceedings.

In New South Wales, a properly drafted letter of demand often results in payment without further action. It signals you’re serious and creates a paper trail if you proceed to the Local Court.

What to include:

• Your ABN and business details
• Invoice number(s), date(s), and amount(s)
• Brief description of the goods or services supplied
• Payment terms from your contract or invoice
• Clear demand for payment within a specified time
• Statement that you will start a claim in the Local Court if unpaid

A letter of demand does not need to be sent by a lawyer. It needs to be clear, factual, and cite the correct legal basis for the debt.

Step 2: Understand Your Legal Basis

Before you escalate, confirm the legal foundation of your claim. In New South Wales, unpaid invoices are typically recovered under:

Contract law — if you had a written or verbal agreement for goods or services, and the other party breached by not paying.

Quantum meruit — if there was no formal contract, but you provided work at the other party’s request, you can claim a reasonable price.

Your letter of demand should reference the relevant law. For example:

• “Payment is due under the Service Agreement dated 12 March 2024.”
• “You requested the work and accepted the benefit, creating an obligation to pay a reasonable sum.”

Step 3: The Local Court’s Small Claims Division (not NCAT)

If the letter of demand is ignored, your next step is a claim in the Local Court of New South Wales. NCAT hears consumer claims, which are brought by a consumer about goods or services supplied to them (Fair Trading Act 1987, s 79E and s 79I); a business chasing a customer for an unpaid invoice is the supplier, so its claim is a debt claim. For debts up to $20,000, you file in the Local Court’s Small Claims Division; over $20,000 up to $100,000, the General Division.

Small Claims Division features:

• No lawyer required to file or present your claim
• Filing fees change each financial year; check the current fee on the Local Court’s website before you file
• Proceedings are less formal and less technical, and the rules of evidence do not apply
• Judgments are binding and enforceable

What you need:

• A statement of claim, which can be filed through the NSW Online Registry
• Copy of the invoice(s)
• Copy of any contract or agreement
• Copy of your letter of demand
• Evidence of delivery (email receipts, registered post tracking)
• Any correspondence showing the debt is disputed or acknowledged

The court does not require a lawyer, but your case must be clear and supported by evidence. The court will hear both parties, review the documents, and make a decision.

Step 4: What Happens in the Local Court

Small claims proceedings are designed to be less formal. Here’s the typical process:

1. Statement of claim filed — you file your claim, pay the filing fee, and serve the statement of claim on the defendant (the debtor).

2. The defendant responds — they can pay, admit the debt, or file a defence. If no defence is filed, you can apply for default judgment.

3. Pre-trial review — a defended small claim goes first to a pre-trial review, where the court tries to help the parties reach agreement.

4. Hearing — if it does not settle, both parties present their case. You show your invoice, contract, and evidence of non-payment. The defendant explains why they haven’t paid (or disputes the debt). Witnesses are generally not called unless the court decides otherwise.

5. Decision — the court gives judgment, on the day or at a later date.

Common outcomes:

• Judgment for the amount owed, plus any interest and costs the court allows
• Payment by instalments, if the court allows it
• Claim dismissed, in whole or part, if the court is not satisfied the amount is owed

If you win, the court gives judgment. If the debtor still doesn’t pay, you can enforce the judgment through a garnishee (wage or bank account seizure) or a writ that lets the sheriff seize assets.

When a Claim Goes Beyond the Small Claims Division

The Small Claims Division suits most unpaid invoices up to $20,000. You may need a different court or tool if:

• The debt exceeds $20,000 (Local Court General Division, up to $100,000)
• The debt exceeds $100,000 (District Court, up to $750,000)
• You need urgent orders, such as a freezing order (get legal advice)
• The debtor is a company and you’re considering a statutory demand

An unpaid invoice is not an NCAT matter at any amount, unless your customer has brought an NCAT consumer claim against you (see below), or the invoice is for residential building work for a homeowner (an NCAT home building claim).

Interest and Costs

In New South Wales, you can typically claim interest on unpaid invoices from the date the debt was due. The rate depends on whether your contract specifies interest terms, or whether you’re relying on statutory provisions.

You can also claim:

• Court filing fee (if the court allows it)
• Service costs (if you paid for registered post or process serving)
• Reasonable debt recovery costs (if your contract allows it)

Whether you recover your filing fee and other costs is up to the court.

What If the Debtor Disputes the Invoice?

If the debtor genuinely disputes the debt — for example, they claim the work was defective, incomplete, or not authorised — the court will hear both sides.

Your evidence matters:

• Signed contract or quote
• Email or text confirming the work was requested
• Proof of delivery or completion (photos, delivery dockets, signed acceptance)
• Correspondence showing the debtor accepted the work without complaint

If the dispute is about quality, the court may reduce the amount owed or dismiss the claim entirely. This is why documentation is critical.

If the dispute looks invented — for example, the debtor suddenly claims defects only after you demanded payment — evidence that they accepted the work without complaint for weeks or months helps you answer it.

If your customer goes further and lodges an NCAT consumer claim against you about the work, NCAT can, in deciding that claim wholly or partly in your favour, order the claimant to pay you a specified amount (Fair Trading Act 1987, s 79O).

Debt Recovery for Companies: The Statutory Demand Option

If the debtor is a registered company (Pty Ltd or Ltd) and owes $4,000 or more, you can issue a statutory demand under the Corporations Act.

A statutory demand gives the company 21 days to pay or face wind-up proceedings. It’s the most powerful debt recovery tool against a company, but it must be used correctly:

• Debt must be liquidated (a specific, ascertained amount)
• Debt must not be genuinely disputed
• The demand must be in the prescribed form and served on the company, for example by leaving it at or posting it to its registered office
• Unless the debt is a court judgment, a supporting affidavit must accompany the demand

If the company fails to pay or apply to set aside the demand within 21 days, you can file to wind up the company.

How Claim Done Helps New South Wales Small Businesses Recover Unpaid Invoices

Claim Done’s Programmatic Algorithms draft a clear letter of demand from what you tell us about your invoice, contract, and correspondence, setting out the debt and its legal basis. The letter is sent to the debtor by email, creating a formal record.

What you get:

• Professionally formatted letter of demand
• Correct legal citations (contract law, quantum meruit)
• Delivery to the debtor by email once you approve it
• $49 flat fee, no subscription, done in about 5 minutes

If the debtor doesn’t pay after the demand letter, you can use the letter and delivery records as evidence in your Local Court claim. Claim Done’s Tribunal Application ($97) drafts a Local Court statement of claim for a New South Wales debt.

For company debtors owing $4,000+, Claim Done prepares statutory demands for $97.

Practical Tips for New South Wales Debt Recovery

1. Keep records — save every email, text, invoice, quote, and delivery receipt. Court decisions are based on evidence, not stories.

2. Act quickly — the longer you wait, the harder it is to recover. Debtors move, close businesses, or spend the money.

3. Be clear and factual — emotional or aggressive language weakens your position. Stick to facts, dates, and amounts.

4. Use the right tool — demand letter first, a Local Court statement of claim if ignored, statutory demand if it’s a company debt of $4,000 or more.

5. Don’t give up — many small businesses write off debts because they think recovery is too hard or expensive. The Local Court’s Small Claims Division is less formal and less technical than other court hearings, and you do not need a lawyer to file.

Enforce the Judgment

If you win in the Local Court and the debtor still doesn’t pay, you can enforce the judgment through:

Garnishee order — seize money from the debtor’s bank account or wages.

Writ for levy of property — instruct a sheriff to seize and sell the debtor’s assets.

Examination notice — require the debtor to complete a statement of their financial position (if that is not enough, the court can order them to attend for examination).

Enforcement is a separate process with additional fees, and how much you recover depends on the debtor’s assets and income.

Get Your Demand Letter Sent Today

If you’re owed money on an invoice that’s been unpaid for 90 days or more, start with a letter of demand. It’s fast, affordable, and often results in payment without further action.

Get your demand letter drafted and sent by email with Claim Done in about 5 minutes for $49. If the debtor doesn’t pay, have Claim Done draft your Local Court statement of claim for $97. For company debtors, issue a statutory demand against a company debtor for $97. No subscription, no hidden fees, no lawyer required.

Frequently Asked Questions

Can I charge interest on an invoice that's 90 days overdue in New South Wales?

Yes. In most cases, you can claim interest from the date payment was due. The rate depends on whether your invoice or contract specifies interest terms, or whether you’re relying on statutory provisions. Your demand letter should state the interest claimed and the basis for it.

Can I take an unpaid invoice to NCAT, and what does it cost to file?

Generally no. NCAT consumer claims are brought by the consumer, so a business chasing an unpaid invoice files a statement of claim in the Local Court: the Small Claims Division up to $20,000, or the General Division over $20,000 up to $100,000. Filing fees change each financial year; check the current fee on the Local Court’s website before you file. You can represent yourself without a lawyer.

What if the debtor claims the work was defective after I send a demand letter?

The court will hear both sides. Evidence that the debtor accepted the work without complaint for weeks or months, and only raised defects after you demanded payment, helps you answer the dispute. Documentation is critical — keep emails, texts, photos, and delivery records.

Can I use a statutory demand for an unpaid invoice in New South Wales?

Yes, but only if the debtor is a registered company (Pty Ltd or Ltd) and the debt is $4,000 or more. A statutory demand under the Corporations Act gives the company 21 days to pay or face wind-up proceedings. It’s the most powerful tool against a company debtor, but must be used correctly.

How long does a Local Court claim take to resolve an unpaid invoice?

If the debtor does not file a defence, you can apply for default judgment. If the debtor disputes the claim, a small claim goes first to a pre-trial review, where the court tries to help the parties agree, before any hearing.