How to recover a debt that is more than $10,000?

In our previous article, we have talked about what you should do when a debt amount is less than $10,000.

But what if the debt amount is more than $10,000?

General Procedure Claim

The Magistrates Court of WA can hear disputes up to $75,000. Recovery of sums larger than this are dealt with by higher Courts whereby the District Court of WA deals with claims from $75,000 to $750,000 and the Supreme Court of WA deals with claims from $750,000 onwards.

Legal representation is allowed for claims of more than $10,000 in the Magistrates Court of WA. Claims of $10,000 or less can sometimes be started under a General Procedure Claim, but, in most cases, if you have a lawyer, you will have to pay your own legal costs even if you win.

Claims in the Magistrates Court

To lodge a claim in the Magistrates Court of WA against your debtor, you must prepare a claim document which has:

  1. The full name, and address, of the individual or company that owes you money;
  2. Details of the debt, including the date and place it happened, the amount, the terms of the agreement (including when it was to be paid back and whether it was a written or verbal agreement);
  3. Any supporting documents such as a copy of the agreement, and evidence showing the transfer of the money or goods (for example, bank statements); and
  4. Details of the amount you are trying to recover, plus any additional costs or interest.

Once you have commenced proceedings in Court, your debtor is referred to as the defendant in the legal proceedings. You must serve your claim on the defendant that owes you money as soon as possible. This means you must give your claim to the defendant.

There  are special  rules  for  serving  a  claim on a defendant. The rules for serving other documents may be different and you must serve your claim as soon as practicable. Generally, your claim must be served within one year after the day on which you lodge it in Court. You may be required to prove you provided them with the documents in Court proceedings.

The timeframe for the defendant to respond to the claim served is usually 21 days. The defendant may choose to:

  • defend the claim;
  • admit  the  claim  in  full  and  agree  to  pay  the amount claimed either in full immediately, or by instalments;
  • admit part of the claim and defend the rest;
  • admit  liability  for  the  claim  but  dispute  the amount claimed; or
  • ignore the claim completely.

The  defendant  may  defend  the  matter  and  also lodge  a “counterclaim”.  This  occurs  when  the defendant believes that either you owe them money or damages; or your claim should be reduced by an amount owed to the defendant.

You  may  lodge  and  serve  a  Statement  of  Claim with  your  claim.  Otherwise  you  must  lodge  and serve your Statement of Claim within  14  days  after  you  have  received  a response from the defendant that indicates an intention to defend the claim.

What if the defendant does not respond to my claim?

If the defendant fails to respond to your claim within the timeframe, you can then ask the Court to make a decision in your favour. You may otherwise be required to attend Court and argue why you should be repaid.

If, ultimately, the debt is ordered to be repaid then a debtor may agree to repay the debt in instalments. If the debt is not repaid, then you may make a further application to the Court to:

  1. Seize and sell property – the property must be sold by public auction, and for a reasonable price; or
  2. Redirect debts – if the debtor is owed money by someone else, this can instead be ordered to be given to you instead; or
  3. Redirect earnings – the debtor’s employer can be ordered to pay most of the debtor’s wage to you leaving only necessary living expenses; or
  4. Redirect other money – if the debtor has money in a bank account, or is due to receive money for rental income, then this can be paid.

If the debtor does repay some of the debt, then always keep records and provide a receipt. Electronic transfers or a bank cheque are often a better option rather than handling cash money in these situations.

Statutory Demand

Another option when dealing with companies that owe you money is to issue a Statutory Demand for the debt owed. A Statutory Demand is a demand made to a company by a creditor under Section 459E of the Corporations Act.

A Statutory Demand can be made by a person who is owed a debt, or more than one debt, totalling more than the statutory minimum, which is currently $2,000.

Under the Corporations Act, a statutory demand must:

  1. Specify the amount of the debt;
  2. Require the company to pay the amount of the debt or secure or compound that amount to the creditor’s reasonable satisfaction within 21 days after the statutory demand is served on the company;
  3. Be in writing;
  4. Be in the prescribed form;
  5. Be signed by or on behalf of the creditor; and
  6. Be accompanied by an affidavit that verifies that the debt is due and payable by the company.

Once a Statutory Demand is served on the company, the company will then have only 21 days to comply with the Statutory Demand or risk being deemed insolvent.


Whether you choose to negotiate with your debtor or to issue a letter of demand and take action in Court against the debtor, it is important to remember that time is of the essence when it comes to collecting a debt owed to you.

There are very strict time limits to recover a debt, so you should not delay in taking action. So please feel free to contact one of our friendly lawyers at AH2 Legal for an obligation free initial consultation to find out if we can help you in your legal matters.