If someone owes you money in Victoria, you can pursue a debt recovery claim and enforce a payment. Enforcing payment for goods and services involves some important steps. You should follow the right procedure to ensure that you can swiftly resolve the dispute and receive your outstanding funds.

Before you commence any debt recovery action, you should take steps to confirm the money owed to you is legally enforceable, and any debts are not subject to Victorian or Commonwealth legislation. Here, the applicable regime is the National Consumer Credit Protection Act 2009 (NCCP Act) and the National Credit Code (NCC), Schedule 1 of the NCCP Act, and the National Consumer Credit Protection Regulations 2010 (Cth), collectively referred to as “the credit law”.

Sending a Letter of Demand

In Victoria, the first step in seeking to enforce a payment for goods or services is to send a Letter of Demand. A Letter of Demand advises the other party that owes you money that money is outstanding. The Letter of Demand should set out a defined period during which they can settle the matter and not face legal action or enforcement steps. It is prudent to engage an experienced litigation lawyer to draft your Letter of Demand. This is to avoid writing a Letter of Demand that harasses the debtor or drafting it in such a way to look like a court document.  Both actions are considered illegal. The Australian Competition and Consumer Commission and the Australian Securities & Investment Commission provide guidelines on what a Letter of Demand should contain.

How to Enforce a Payment Through VCAT

Once the debtor receives a Letter of Demand, they may choose to: 

  • Pay the outstanding amount in full, 
  • Show that they do not owe any money, 
  • Negotiate a compromise, or
  • Ignore the letter.

If a debtor chooses to ignore the letter or respond to it in a way that is unsatisfactory to the creditor, you can commence an action in a small claims tribunal. In Victoria, this is located in Melbourne at the Victorian Civil and Administrative Tribunal (VCAT). VCAT can deal with claims arising under the Australian Consumer Law and Fair Trading Act 2012 (Vic).

If you are applying under the Australian Consumer Law and Fair Trading Act, you must pay a VCAT fee. As of 1 July 2015, this ranges from $59.80 for a claim less than $500, to $2086.20 for claims $1 million or more. There is no limit on the cost or value of the goods or services in dispute in VCAT. Importantly, VCAT cannot hear certain cases, including:

  • Disputes between employees and employers as they do not concern services,
  • Drivers in a car accident, or
  • People unconnected with Victoria.


LegalVision’s litigation and dispute resolution lawyers have experienced in enforcing debts in Victoria and lodging applications through VCAT. They can also assist you in settling the dispute through mediation or conciliation. 

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