Close-up Of A Person Hand Stacking Coins In Front Of Mallet Over Gray Background

Is your debt worth pursuing? Knowing when to cut your losses

Reba Maxwell ||

If you’re a small business owner, you may find yourself in a situation where you have supplied your goods and/or services to a client but you haven’t been paid. In this situation, it can be difficult to know whether your debts are worth pursuing and when you should speak with a lawyer for advice or to help with debt recovery.

Taking it to Court

In NSW, in order to sue a person or company for a debt of less than $100,000, you will likely need to commence proceedings in the Local Court of New South Wales. It is important to know before commencing proceedings in the Local Court that:

  1. you will have to pay a filing fee (of up to $618);
  2. the Court proceedings can last anywhere up to 18-months from the time that you commence proceedings through to obtaining an outcome; and
  3. your costs will be capped. This means that even if you are successful in the proceedings, the unsuccessful party may only have to pay a small portion of your legal costs, leaving you out of pocket.

If your debt is worth less than $20,000, the ordinary position of the Court is that it will not award you any of your legal costs pursuant to section 37 of the Local Court Act 2007 (NSW).

So, what are my options outside of Court?

There are several cost-effective steps that we can help you take to attempt to recover a debt without commencing litigation, such as issuing a letter of demand or attending a mediation.

We can advise you on the commerciality of pursuing your debts, your prospects of success, the debt recovery options available to you, and whether chasing a debt is appropriate in your circumstances.

In addition, we can provide you with advice in relation to your existing Terms and Conditions or regarding obtaining security from your clients from the outset in order to bolster your chances of recovery (read our top five tips for getting paid here). By helping you to fully understand your options and working with you to take action accordingly, we aim to help you get paid.

If you would like to discuss your how you can recover payment for goods/services supplied or would like to discuss ways to minimise the possibility of this occurring, please contact Coleman Greig’s Debt Recovery team.



Send an enquiry

Any personal information you provide is collected pursuant to our Privacy Policy.


More posts

Understanding roles in the strata scheme

A strata scheme is a building or group of buildings that have been divided into lots which can be apartments, villas, offices, units or townhouses. This will be articulated in the strata plan.

Can i put my home on Airbnb?

Airbnb is a form of short-term rental accommodation. To add your property to Airbnb in NSW, you are required to meet several laws and regulations governing short-term rentals.

When are liquidators required to seek approval to retain legal counsel?

When does a liquidator (or the company he or she is appointed to) need court, creditor, or committee approval to validly retain a solicitor to act in a liquidation matter which is likely to extend for longer than three months?  The answer to this question has only recently been settled.

Proposed changes to building and construction law in NSW

The Building Bill 2022 (the Bill) is the key avenue through which the NSW Government has proposed to reshape the culture of the building and construction industry by eliminating poor performance and improving the quality of building statewide.

Can you dismiss an employee who fails to return to the office?

Slowly but surely, most employers are requiring employees to return to the office for at least a portion of their working week. Some employers continue to struggle with employees resistant to returning to the office or those who have an expectation that they can continue to work from home whenever it suits them.

New powers to combat phoenixing in construction

The rise of phoenixing in the building and construction industry in Australia in recent years has proved a significant challenge to regulators. Mismanagement of time or cashflow can quickly propel businesses into insolvency.

The NSW Building Commission’s extraordinary powers

In late 2023, the NSW Government passed the Building Legislation Amendment Bill 2023 (Amendment Bill). The Amendment Bill established the NSW Building Commission and granted it extraordinary powers to enter construction sites, inspect work and take away information and materials.

© 2024 Coleman Greig Lawyers   |  Liability limited by a scheme approved under Professional Standards Legislation. ABN 73 125 176 230