It is quicker and cheaper to try to fix the problem without going to court, if you can. You could write a letter of demand, negotiate with the debtor or try free mediation through a Community Justice Centre. For information on these options, see
Do I have to go to court?
If you have sent a letter of demand and the debtor still has not paid you, you may want to consider starting a case in the Local Court. If the debt owed to you is less than $10 000 you can start a case in the Small Claims Division of the Local Court. To find out the steps involved, see
Starting a case.
Before you start a court case, you should get
legal advice about the strength of your case. If you lose your case, you will usually have to pay the other party's costs.
A letter of demand is a letter asking that you pay a debt by a particular date. The letter will usually threaten legal action if the money is not paid.
You have options when you receive a letter of demand. You could:
For help with what to do when you get a letter of demand, see
Responding to a Letter of Demand.
A statement of claim is a document that starts a court case against you.
You have some choices about how to respond to the statement of claim. If you do not agree that you owe the money, you can file a Defence with the court. A Defence is a document that says that you deny owing all, or part of the money claimed and sets out the reasons why. You have other options including acknowledging the debt, filing a cross claim and negotiating with the plaintiff.
You should get
legal advice on the strength of your case before deciding how to respond to a statement of claim. If you lose the case, you will usually have to pay the other party's costs.
You have 28 days to file a defence from when you are served with the statement of claim.
For more information about your options see
Responding to a Statement of Claim.
After you have filed and served your Statement of Claim, the next steps in your case depend on what the defendant does.
The defendant may:
For information on these options see
During the case. If the defendant files a defence you will be given a copy. Your case will then be listed in court for a Pre Trial Review. For more information on what happens after a defence is filed, see
If your case has a hearing date you will have already been to a Pre Trial Review. On that day, the registrar or magistrate will have made orders that you exchange all your evidence with the other side and file copies at the court. Usually this must be done at least 14 days before the date of the hearing.
After the Pre Trial Review, you can prepare your witness statements and any other evidence you want the court to consider like letters, emails, contracts, diagrams or photographs, invoices or receipts. Give yourself lots of time to do this and remember to keep copies of all the evidence. For more information, see
Instructions for preparing witness statements and
Sample witness statements - Defendant.
After you have received the plaintiff's evidence, read it carefully and prepare what you are going to say in court. It is a good idea to write down what you want the magistrate to consider in your case. You should also plan a list of all the documents you are going to take to court.
For more information see
Preparing for the hearing - Step by step guide and
Preparing for the hearing - Frequently asked questions.
Legal costs usually refer to the cost of lawyer's fees as well as the expenses involved in running a case, such as fees for subpoenas and witnesses and fees for getting copies of records and expert reports.
The court may order that whoever loses the case pay the legal costs of the winning side.
If you do not have a lawyer, you will not be able to make a claim for lawyer's fees but you may still be able to claim the other fees and expenses. You cannot claim your costs for missing time at work or other expenses like travelling to court.
In the small claims division, there is a limit on the amount of lawyer's costs either you or the other side can claim. For more information see
Do I have to go to court? - Questions to consider.
A judgment is an order from the court. A default judgment is an order made without you being there.
If you did not know about the case and you would now like to defend the case you can apply to the court for an order to set aside the default judgment. If the court sets the default judgment aside you will then have a hearing in your case.
If there is a default judgment against you, you should get
legal advice before taking any steps.
For more information on your options when a judgment is made against you see
After the case - Debtor and
Responding to a Writ for the Levy of Property. For more information on setting aside a default judgment see
Applying to set aside default judgment and
Applying to set aside default judgment - Step by step guide.
If you have a judgment and the debtor still does not pay, you can take action to try and make the judgment debtor pay the debt. This process is called 'enforcement'.There are a number of ways you can enforce the debt.
If you are considering trying to make the debtor bankrupt or winding up a company you should get
legal advice. Bankruptcy can be expensive and complicated.
For information on options for enforcing the judgment see
Enforcing a judgment debt.
A judgment is an order from a court to pay money to the creditor. If you do nothing and do not pay the debt, the creditor can take steps to force you to pay. This is called enforcement. For more information about the steps a creditor can take to enforce a debt see,
Responding to enforcement action.
If you cannot pay the judgment debt, there are some things you can do. You could negotiate with the creditor to pay the debt. See
Negotiating with the creditor after judgment for information. If the creditor will not negotiate you can make an application to the court to pay the debt off by instalments. For information on making this application see
Payment by instalments - Debtor.
Once an instalment order is made, and as long as you pay the instalments, the creditor cannot take any other steps to enforce the debt.