If someone owes you money and they are refusing to pay, there are several things you can do to try and recover your money.
When someone owes you money, you are known as a creditor and the person who owes you money is a debtor.
If they refuse to pay, you may need to apply to court to get an order saying that they owe you the money. If they still refuse to pay, there are ways to enforce a court order.
Be aware of time limits
There are time limits that apply to collecting debts. If you wait too long to pursue recovering your debt from the debtor, you may be barred from pursuing them for the money.
Options for recovery of your money
If someone owes you money and they are refusing to pay, there are several things you can do to try and recover your money. You can:
- contact the person and try to come to another agreement
- send a letter demanding payment (called a letter of demand)
If the loan is to a company, there may be more options available to you. You should get legal advice.
If they still don’t pay and you want to try to recover your money, you’ll need to take legal action.
If your dispute is with another person, a business or a company and is for a fixed sum of money less than $25,000, you may be able to apply to the New South Wales Civil and Administrative Tribunal (NCAT).
If the amount owed to you is more than $25,000 you can apply to court.
Applying to the NCAT
NCAT is an independent tribunal which is accessible, quick and inexpensive to use. It has information about handling debt disputes, including information on what steps you can take on your own to recover your money and how to apply to NCAT.
You should get legal advice before applying to NCAT.
Applying to court
Which court you apply to will depend on how much money is in dispute.
You’ll need to apply to:
- the Magistrates Court for claims up to $150,000
- the District Court, for claims up to $750,000, or
- the Supreme Court, for claims over $750,000.
NSW Courts has information for people representing themselves about money disputes in the Magistrates Court, District Court, or Supreme Court. This includes information about how to lodge your claim, defend your claim, and how to get your money after the court makes a judgment.
You should get legal advice before you file documents.
Enforcing a money order
If the court or tribunal agrees that someone owes you money, they will make an order saying that they owe you money. If the debtor still refuses to pay after the court has made an order (money order), you’ll need to apply to court to enforce the order to get your money.
NCAT has information on how to enforce a decision, including how to enforce a minor civil dispute decision.
NSW Courts also has information about getting your money after judgment.
One thing you can’t do is have the debtor sent to jail for not paying you.
You have 6 years (extendable up to 12 years) to enforce an order of a court or NCAT. If it’s more than 6 years since the debt was owed, you should get legal advice.
Do I need legal advice?
You may need legal advice if you:
- are considering applying to NCAT or court to resolve a debt dispute
- have an order from NCAT or the court that someone owes you money, but they still won’t pay.