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NSW · Civil Litigation

How to recover a debt under $100,000 in NSW

In short

Debt recovery for amounts up to $100,000 in NSW is generally handled in the Local Court (general division). The process starts with a letter of demand, followed by a statement of claim if the debt is unpaid. Default judgment is available if the debtor does not file a defence within 28 days.

Who: Creditors (including businesses) seeking to recover commercial or other civil debts in NSW. The Local Court general division has jurisdiction up to $100,000.
Where: NSW Local Court (general division) for debts up to $100,000. Smaller debts may go to the small claims division (under $20,000) with simpler procedures.
Time: 2-4 months from filing to default judgment if undefended. Defended matters typically take 6-12 months. Enforcement timelines vary by method.
Fees: Local Court filing fees apply based on the amount claimed. Service costs vary depending on method.
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Legal basis

The framework

Civil debt recovery in NSW is governed by the Civil Procedure Act 2005 (NSW), the Uniform Civil Procedure Rules 2005 (NSW), and the Local Court Act 2007 (NSW).

10 steps

The process

1

Send a letter of demand

Issue a formal letter of demand setting out the debt, the basis for the claim, and a deadline for payment (typically 14-28 days).

You or your lawyer
2

Calculate interest and costs

Calculate any interest payable under the agreement (or under the Civil Procedure Act default rate) plus recoverable costs.

You
3

Verify the debtor is solvent

Run a basic solvency check before commencing proceedings — there is no point in winning a judgment against an insolvent debtor.

You
4

Draft the statement of claim

Draft a statement of claim setting out the parties, the debt, the basis for the claim, and the amount sought.

Your lawyer
5

File the statement of claim

File the statement of claim in the Local Court general division. Pay the filing fee.

Your lawyer
6

Serve the debtor

Serve the sealed statement of claim on the debtor in accordance with the rules of service. Personal service is most reliable.

Process server
7

Wait for the defence period

The debtor has 28 days from service to file a notice of appearance and defence. If they do not, you can apply for default judgment.

The debtor
8

Apply for default judgment if no defence

If the debtor does not file a defence in time, file an application for default judgment with proof of service and the amount claimed.

Your lawyer
9

Enforce the judgment

If judgment is entered, enforcement options include garnishee orders, writs of execution, examination summonses, and bankruptcy / winding up proceedings.

Your lawyer
10

Recover costs and interest

Once the judgment is paid, recover any awarded costs and interest from the debtor.

You
Forms required

Forms and templates

Avoid these mistakes

Common mistakes

  • Skipping the letter of demand — most debtors pay after the demand without proceedings
  • Filing in the wrong division (small claims vs general)
  • Inadequate service — failed service blocks default judgment
  • Not running a solvency check before commencing
  • Forgetting to claim interest and costs in the statement of claim
Use with Quillio

Get this process right with Quillio

Quillio drafts statements of claim, notices of motion for default judgment, and letters of demand for NSW debt recovery matters. See /practice-areas/litigation-lawyers or start a free trial.

This guide is general information about NSW debt recovery — not legal advice. Consider obtaining advice specific to your matter, particularly for large or complex debts.

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