Reading time: 3 minutes

If someone owes you or your business money for goods supplied or services rendered in Western Australia, you can take steps to enforce a payment. You can also recover the money owing to you through the Magistrates Court in WA. However, we will explore this avenue for debt recovery in part two of this series. 

Send a Letter of Demand

Before commencing any action, it is sensible to send the person owing you money, the debtor, first and second reminder letters. These may assist with maintaining your business relationship. If this is unsuccessful, your first step will be to send a Letter of Demand, addressed to the debtor. The Letter of Demand should:

  • Outline the details of the debt owed,
  • Provide the debtor a timeframe in which to repay the amount, and
  • Put the debtor on notice that if money is still unpaid by that time, you will commence legal action.

A Letter of Demand provides the debtor with the opportunity to make payment and to, if necessary, negotiate a repayment plan. Legal proceedings can be expensive, and so it can be beneficial to both parties if you can settle the matter outside of Court.  

Unfortunately, however, a Letter of Demand may not always result in the debtor making payment. If you choose to take further action to enforce payment, your Letter of Demand may be used as evidence demonstrating your attempts to settle the matter.

What Next?

Once you send a Letter of Demand, the debtor can respond in a number of ways including: 

  • Admitting the debt and paying the outstanding amount,
  • Negotiating a payment plan with you,
  • Ignoring the letter, or
  • Disputing the existence of the debt or the amount owed.

If the debtor disputes the debt, it is then up to you to decide what your next step will be. You have the option of commencing legal action through the Magistrates Court, or you can write the debt off. You will need to weigh up the debt amount against the costs of litigation to decide whether it is worth pursuing. For example, if the debt is $2,000 or less, it may not be worth pursuing this through the court process.

Debt Recovery Action

The amount of money owed determines the process you will need to undertake to recover your debt.

The Magistrates Court deals with each of the following debt claims: 

  • Minor claims for debts up to $10,000, 
  • General Procedure Claims for debts between $10,001 and $75,000, and 
  • Consumer claims over the sale, supply or hire of goods or services up to the amount of $50,000.


If you have any questions about enforcing a payment or require assistance with recovering a debt owed to you, please get in touch on 1300 544 755. One of LegalVision’s experienced Litigation and Dispute Resolution lawyers would be delighted to step you through this process. In the meantime, you can continue reading about how to enforce a payment through Western Australia’s Magistrates Court.


Construction Contract Essentials

Thursday 12 August | 11:00 - 11:45am

Understand how construction contracts are drafted and how to protect your construction business.
Register Now

Startup 101: Understanding Cap Tables and ESOPs

Thursday 19 August | 11:00 - 11:45am

Cap tables and employee share option plans are essential for fast-growing startups. Learn more with this free webinar.
Register Now

About LegalVision: LegalVision is a tech-driven, full-service commercial law firm that uses technology to deliver a faster, better quality and more cost-effective client experience.

The majority of our clients are LVConnect members. By becoming a member, you can stay ahead of legal issues while staying on top of costs. From just $119 per week, get all your contracts sorted, trade marks registered and questions answered by experienced business lawyers.

Learn more about LVConnect

Need Legal Help? Get a Free Fixed-Fee Quote

If you would like to receive a free fixed-fee quote or get in touch with our team, fill out the form below.

  • 2020 Excellence in Technology & Innovation – Finalist – Australasian Law Awards 2020 Excellence in Technology & Innovation Finalist – Australasian Law Awards
  • 2020 Employer of Choice – Winner – Australasian Lawyer 2020 Employer of Choice Winner – Australasian Lawyer
  • 2021 Fastest Growing Law Firm - Financial Times APAC 500 2021 Fastest Growing Law Firm - Financial Times APAC 500
  • 2020 AFR Fast 100 List - Australian Financial Review 2020 AFR Fast 100 List - Australian Financial Review
  • 2021 Law Firm of the Year - Australasian Law Awards 2021 Law Firm of the Year - Australasian Law Awards
  • Most Innovative Law Firm - 2019 Australasian Lawyer 2019 Most Innovative Firm - Australasian Lawyer