Debt Recovery - a General Overview
February 19, 2026
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Securing money owed to you can be time consuming, frustrating and ultimately futile if your options are not clearly understood. In extreme cases, an unpaid debt can lead to the failure of the creditor’s own business.
Debt recovery is the process of recovering unpaid debts through letters, email, phone calls and/or personal contact with a person who has neglected his/her end of the deal to pay for services or products you have supplied.
Bailiwick Legal are experienced in helping clients recover money that is owed by another business. We have a detailed understanding of the legal remedies available to you. We pursue both formal and informal channels of debt recovery until a satisfactory outcome is reached.
In addition, we help clients set up robust terms of trade, properly secure any debts, and provide options for fast and efficient recovery.
The Debt Recovery Process
The Process can be summarised as follows:
1. Contacting the Debtor
Before going straight to court, it is wise to first contact the debtor and ensure repayment of the debt is unlikely. The debtor may usually be contacted by phone, mail or email.
2. Letter of Demand
If the debtor fails to repay the debt, a letter of demand can be sent. The letter of demand will include the details of the debt and instructions for payment including expected time of payment. A letter of demand will state that the matter has now entered the debt recovery process and may potentially result in legal proceedings in a Court.
3. Start Court Proceedings
Commencing Court proceedings will be the next and final step of the debt recovery process. Commencing court proceedings involves several legal processes, time limits and details which must be fulfilled, which is why seeking legal advice early is highly recommended.
However before commencing Court proceedings, the relevant Court must first be identified. The amount of the debt you are seeking to recover will determine which Court will be engaged.
Generally:
- claims less than $75,000 will be commenced in the Magistrates Court
- claims between $75,000 and $750,000 are in the District Court
- claims above $750,000 are in the Supreme Court.
The three Courts all have different processes and procedures, which we at Bailiwick Legal can explain in plain language and guide you through.
At Bailiwick Legal, we highly recommend seeking legal advice and representation when seeking to recover debts in the Courts due to the numerous rules and processes the parties must comply with to give yourself the best chance of recovering your debt.
4. Judgment
Once Court proceedings have been commenced there are many ways that judgment can be made against a debtor. A judgment against a debtor allows you to use the Court processes to then recover the debt.
Recovering Judgments
If the debtor fails to repay the debt after judgment has been awarded, you should commence enforcement proceedings to recover the judgment from the debtor using the Civil Judgement Enforcement Act procedures in the Court.
As an alternative, there are the below options:
- Bankruptcy notice – if debtor is an individual followed by a Sequestration Order – (if the bankruptcy notice is not satisfied)
- Statutory demand – if debtor is a company followed by a winding up petition (if the statutory demand is not satisfied)
Once judgment is awarded in your favour, we can advise you of the best avenue to recover the debt.
Summary
Debt recovery is a complex process, where obtaining legal advice is essential and vital to ensure all processes are complied with. Legal advice will ensure your situation is analysed to determine the best process to undertake and will assist your claim tremendously.
At Bailiwick Legal, we can:
- Help you get back money you are owed through informal as well as formal debt recovery.
- Help set up your credit and debt process, so they properly protect your business from bad payers, and provide options for fast and efficient recovery if required.
- Help you reach a workable and commercial solution through negotiation and other alternative dispute resolution.
- Draft letters of demand and other process documents to prompt recalcitrant debtors into action.
- Apply to wind up a company, pursue director guarantees, or take other legal action needed to protect your interests.
If you would like further information in relation to how the above matters may affect your business, please contact us on (08) 9321 5451 or by email at office@bailiwicklegal.com.au.
By Luke Davies (Special Counsel)
For further information about our legal services, please visit our website: https://www.bailiwicklegal.com.au/
The above information is a summary and overview of the matters discussed. This publication does not constitute legal advice and you should seek legal or other professional advice before acting or relying on any of the content.

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