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Certainly, one of the most frustrating aspects of running your own business is providing a great service or delivering a quality product, only to find that your customer or client is unwilling to pay. Familiarising yourself with the steps to enforce a payment and recover money owed is then a smart business investment. If you are seeking to enforce a payment in South Australia, you can read about the process involved below.

Preliminary Steps

Critically, if your business provides services or products, your Terms and Conditions should clearly outline how customers will pay and the time frame. If a customer then refuses to pay, you can refer them to the document they signed, indicating their agreement to your payment terms.

It is sensible to send the debtor first and second reminder notices of the money owed. Attempting to resolve the matter in this way can save both parties the time and costs associated with litigation, and may preserve the business relationship between parties.

Letter of Demand

If, following these attempts, you still could not recover the money owed, you will then send the debtor a Letter of Demand outlining:

  • Amount owed,
  • Invoices already sent,
  • Goods/services that you provided,
  • When the debtor needs to pay the debt,
  • How to pay, and
  • Consequences if the debt is unpaid, including commencing legal proceedings.

Debtor’s Response

Your debtor has 21 days to respond to the Letter of Demand and can respond by:

  • Settling the matter at mediation, 
  • Paying the debt, or
  • Ignoring the letter.

You and the debtor should have any agreement reached on payment terms in writing. For example, repaying a slightly lesser amount than the money owed or payment instalments. Both parties should also sign an Enforceable Payment Agreement (EPA), demonstrating to the Court that you have reached agreement. An EPA gives you rights if the debtor breaches their obligations. 

Enforce a Payment through the Minor Claims Division

If your debtor contests the amount owed or does not respond, you should file a Statement of Claim in the appropriate division in South Australia’s Magistrates Court. 

  • The Minor Claims Division hears claims under $25,000;
  • The General Claims Division hears claims between $25,001 and $100,000;
  • The District or Supreme Court hears claims over $100,000.

You can request the Court enter default judgment in your favour if the debtor fails to respond. This essentially orders the debtor to pay the debt.

What if my Debtor Ignores the Default Judgment?

Ignoring a default judgment attracts serious penalties but this doesn’t always prevent someone from failing to respond to an order.

Should this occur, you can ask the Court for:

  • A Garnishee order (recovering a judgment debt from the debtor’s bank account or wages);
  • File for compulsory bankruptcy (an order that the debtor is declared bankrupt and ordered to pay their debts);
  • A Warrant of Sale (allowing the Sheriff to sell a debtor’s real or personal property to satisfy a debt); or
  • An Investigation Hearing – summoning the debtor to explain their finances to the court and why they cannot pay the judgment debt.


Having clear terms and conditions can avoid many situations where there may be a dispute over payment. If, however, a debtor still fails to pay, you should then issue a letter of demand asking the debtor to make payment. If you receive no response, file your statement of claim and initiate proceedings in the relevant court.

Should you have any questions about how you can enforce a payment in South Australia, LegalVision’s experienced litigation and dispute resolution lawyers would be pleased to assist! Please get in touch with us on 1300 544 755.


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