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Creditor (when you are owed money)

Information about recovering a debt less than $100,000.

  • This topic covers

    This topic covers

    • How to recover a debt less than $100,000
    • Sending a letter of demand
    • Starting legal proceedings
    • Enforcing a judgment

    Customers should get legal advice about complex claims and claims/debts that do not fall within the jurisdiction of the Local Court of NSW.

    This topic does not cover personal injury or compensation matters. 

Time limitAction
Six years from when the money became owed, or from when the debt was last acknowledged in writing or a payment was madeTo start legal action.
Six monthsTo serve the Statement of Claim from the date it is filed with the Court.
28 calendar daysFor the debtor to respond after being served with a Statement of Claim. If they don't respond, you can apply to the Court for default judgment after 28​ days of the debtor being served with the Statement of Claim.
Nine monthsTo apply for default judgment from the date you filed your Statement of Claim.
12 yearsTo enforce a judgment debt.
Six yearsTo register a NSW Civil and Administrative Tribunal (NCAT) order with the Local Court. Once the NCAT order is registered, you have 12 years from the date of registration to enforce the judgment debt.

Organisation

OrganisationResponsibilities
Local Court Small Claims DivisionHears claims for $20,000 or less
Local Court General DivisionHears claims for more than $20,000 but less than $100,000 (or up to $120,000 if the parties agree)
District CourtHears claims for more than $100,000 but less than $1,250,000.
Supreme CourtHears claims for more than $1,250,000.

Legislation

AuthorityCovers
Civil Procedure Act 2005 (NSW)The law in relation to civil proceedings in the Local, District and Supreme Court of NSW (as well as some other jurisdictions).
Uniform Civil Procedures Rules 2005
Local Court Act 2007 (NSW)The jurisdiction and procedures of the Local Court.
Local Court Rules 2009
Civil Procedure Regulations 2017 (NSW) 
Schedule 1 Part 3 of the Legal Profession Uniform Law Application Regulation 2015 Sets out the maximum amount of legal costs that can be awarded in the Local Court. 

Common termDefinition
CreditorA person who is owed money, or believes they are owed money. When legal action starts they are known as the plaintiff.​​
Credit report

A report that contains information about your credit history including loan accounts, credit limits, repayment history, payment defaults, dishonoured cheques, court judgments and bankruptcy orders. 

For more information, see the factsheet Your credit report on the Financial Rights Legal Centre website.

Cross claimLegal proceedings taken by the defendant when they believe the plaintiff or a third party owes them money. A Cross Claim is filed when the plaintiff has already filed a Statement of Claim.
DebtorThe person who owes money, or is said to owe money, to a creditor. When legal action starts, they are known as the defendant.
Default judgmentJudgment made in favour of the plaintiff without a hearing, when the defendant has not taken any action to defend the claim.
DefenceThe defendant can file a Defence form if they dispute the debt claimed by the plaintiff in their Statement of Claim.
DefendantIf the creditor starts legal action against the debtor, the debtor is called the defendant.
Examination NoticeA form sent to a defendant/debtor to get information about their income, assets and liabilities.
Examination OrderA court order asking the defendant/debtor to attend court to answer questions and show documents about their financial position.
Judgment debtThe amount of money a court orders a defendant to pay a plaintiff. It can include all or part of the original amount claimed, plus court fees and interest up to the date of judgment.
​Notice of Orders made​A document sent to the parties by the Court after the case. It tells the parties what order or judgement was made by the Court and if any action needs to be taken by the parties, including making a payment.
PlaintiffA person who starts a civil case against another person in court.
Pre-trial reviewThe first stage of a debt case in the Small Claims Division of the Local Court. At the pre-trial review the Registrar will try and help the parties settle the case. If the case does not settle, the Registrar may set a date for the hearing and tell the parties what to do to prepare for the hearing. 
Statement of ClaimA document used by the plaintiff to start a civil case in court. It tells the Court and the defendant what the plaintiff is claiming and why.
Writ for levy of propertyA court order to the Sheriff, telling the Sheriff to go to the judgment debtor's house and seize property to be sold at auction. The money raised from the auction is used to pay off a judgment debt.

OrganisationFee
Local Court of NSW

OrganisationForms
Uniform Civil Procedures Rules (UCPR)Civil forms

TypeCosts
Legal costs

You can claim your lawyer's costs if you are successful in legal proceedings.

If you are unsuccessful, the Court may make a costs order against you.

Legal costs in the Small Claims Division of the Local Court are capped, which means you can only recover a small portion of your legal fees from the other party if you are successful.

Woman working on computer

Frequently Asked Questions

Frequently Asked Questions about recovering a debt you are owed less than $100,000.

Go to questions

More services

Solicitor Referral Service

If you need a lawyer, the Law Society of NSW Solicitor Referral Service (SRS) can provide you with a referral.

Last updated: February 2024