Debt Recovery Lawyers in Melbourne

When a business customer stops paying, you want your money back without spending more time and legal cost than the debt is worth. Our debt recovery lawyers help business owners, bookkeepers and credit managers choose the right next step and see it through.

Hendersons Legal is a Melbourne law firm established in 2001, and our debt recovery and insolvency lawyers act for creditors chasing unpaid commercial accounts, as well as for company directors and liquidators. If you are looking for debt recovery lawyers in Melbourne, this page walks through the usual path from an overdue invoice to a court judgment and enforcement. Because we also act for liquidators and directors, we check for conflicts before we discuss the details of a matter.

This page is for businesses owed money by a customer, whether that customer is a company or an individual. It does not cover consumer debt collection. If you are the one who has received a demand, see our page on setting aside a statutory demand. Our principal, David Henderson, has more than 30 years’ experience.

Start by confirming who owes you the money

Check that you are chasing the right person. Do your credit application, terms of trade and invoices name a company, an individual, a trust or just a trading name?

ABN Lookup shows the entity name, ABN status and ACN. ASIC’s company register shows whether a company is registered, deregistered or under external administration. The structure matters. A sole trader is personally responsible for the business’s debts. The owners of a company are not liable for its debts just because they own it, although directors can be personally liable in some situations, such as where they signed a personal guarantee.

Then gather what proves the debt: signed terms of trade, any personal guarantee, invoices, delivery records, statements, and emails where the customer admitted the amount or raised a problem.

Before court: a letter of demand and a payment plan

A lawyer’s letter of demand

A letter of demand states the amount, the deadline to pay and what you will do if it is not paid. Coming from a law firm, it shows the debtor you are serious. We keep it accurate and measured, and we only say we will take a step if you are prepared to take it.

Negotiating and documenting a payment plan

A debtor will often offer to pay over time. That can be a sensible outcome if it is recorded properly. The plan should set out the total owed, each payment and its date, what happens if one is missed, and who is bound. If a director or another guarantor is liable, they should sign too. A handshake or a string of emails is harder to rely on if the plan breaks down.

Statutory demands for company debtors

If the debtor is a company and the debt is due and payable and at least $4,000, a creditor’s statutory demand is one option. The company then has 21 days to pay, secure or compound the debt, or apply to set the demand aside. If it does none of those things, the law presumes it is insolvent, which can support a winding up application. We explain how this works, and the traps, in our blog post Chasing a company debt? How a statutory demand can help. Where a winding up is the right step, we appear in the Supreme Court’s winding up list ourselves (see winding up applications).

Which Victorian court hears a business debt claim?

Magistrates’ Court of Victoria

The Magistrates’ Court can hear civil claims for a debt up to $100,000. You start by filing a complaint and serving it on the debtor. The debtor then has 21 days after service to file a notice of defence.

If the debtor does not file a defence

Once the 21 days have passed with no defence filed, you can apply to the court for an order in default of defence, usually called a default judgment. If the court makes the order, you can start enforcing it. If a defence is filed, a default judgment is not available and the claim goes on through the court process.

County Court and Supreme Court

Claims above $100,000 are heard in a higher court. The County Court hears civil matters above that figure, and the Supreme Court deals with complex civil matters, including complex commercial disputes. Our court representation and litigation lawyers can advise on where a claim should be filed.

Enforcing a judgment

A judgment on its own does not pay you. In the Magistrates’ Court, enforcement is not automatic, and you must apply for each step. The court’s civil enforcement options are:

• Summons for oral examination: the debtor must attend court and disclose their income, assets and debts, which helps you choose the next step.
• Warrant to seize property: the sheriff can seize the debtor’s goods and sell them at auction, with the proceeds going towards the debt.
• Attachment of debt: an order that money owed to the debtor by someone else is paid to you instead.
• Attachment of earnings order: the debtor’s employer deducts money from their wages and pays it to you.
• Instalment order: the debt is repaid in regular instalments under a court order.

Which option makes sense depends on what the debtor actually has and earns. An oral examination can help answer that before you spend more on enforcement.

When the debtor is an individual: bankruptcy

Bankruptcy is a federal process under the Bankruptcy Act 1966 and applies to individuals, including sole traders and people who signed a personal guarantee. As at October 2026, the Australian Financial Security Authority (AFSA) sets out these requirements:

• A bankruptcy notice needs a final judgment or order for at least $10,000 that is no more than six years old.
• The debtor has 21 days from service of the notice to comply. Not complying is an act of bankruptcy.
• A creditor’s petition needs a debt of $10,000 or more and an act of bankruptcy within the six months before you apply.

Time limits for recovering a debt

In Victoria, an action founded on a simple contract generally must be brought within six years of when the cause of action accrued (Limitation of Actions Act 1958 (Vic) s 5(1)(a)). An action on a judgment has 15 years from when the judgment became enforceable (s 5(4)). Different rules apply to some claims, so do not leave it late.

If your customer has collapsed

ASIC says that once a company is in liquidation, unsecured creditors cannot start or continue legal action against it unless the court allows it. Instead, you lodge a proof of debt with the liquidator. Unsecured creditors are paid after other categories, so you may receive little or nothing.

A liquidator can also challenge some payments the company made before it collapsed. If a payment you received shortly before liquidation is questioned, read our blog post Liquidator demanding money back? Unfair preference claims in Victoria and our page on unfair preference claims, and get advice before you repay anything.

Interest and costs

Start with your terms of trade. They may allow interest on overdue accounts and the recovery of collection costs, but whether you can charge them depends on what the customer agreed to.

In the Magistrates’ Court, the filing fee can be claimed as costs on top of the amount sought,. The legal costs that can be claimed from the other side follow the court’s scale of costs, so we never assume you will get back everything you spend.

Stopping the next bad debt

• Terms of trade that set out payment terms, interest on late payment and recovery costs, accepted before your first supply.
• A credit application that records the correct legal entity, ABN or ACN, directors and trade references.
• Personal guarantees from directors where the credit limit justifies it. Our commercial contracts lawyers can prepare and review these documents.
• A retention of title clause, registered on the Personal Property Securities Register (PPSR). Registering gives you a better chance of recovering the goods or their value, and an unregistered supplier will probably be treated as an unsecured creditor if the customer becomes insolvent. See our finance and securities page.

When to call a debt recovery lawyer in Melbourne

• An invoice is overdue and your reminders are being ignored.
• You are not sure whether you are chasing a company, a trust or an individual.
• You have a judgment but the debtor has not paid.
• A director or other person gave a personal guarantee.
• Your customer has gone into liquidation, or a liquidator has written to you.
• The debt is getting old and you are unsure how much time is left.

This is general information, not legal advice. Every situation is different, so get in touch about yours.

Send us the details

Use our online enquiry form to tell us who owes you money and upload your invoices, terms of trade and any guarantee. If a deadline is close, call (03) 9629 2211 as well, because an enquiry does not stop time running.

Questions business owners ask us about debt recovery

How it works

1. Call (03) 9629 2211 or send us the details through our online enquiry form. Tell us who owes you money and how much, and send whatever you have, such as invoices, terms of trade, a guarantee and recent emails.
2. We clarify your instructions and take a first look at the documents.
3. We send you a costs agreement and disclosure statement setting out the scope of the work and our fees.
4. Once you accept, we start work and keep you posted.