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Debt Recovery Bundledebt recovery bundle

Is the debt recoverable? A client should be asked some basic questions to determine if a debt actually exists under general common law principles. That is, there should be a contract of some description if only a verbal agreement. Some goods or services supplied would have been supplied by the plaintiff (or other form of valuable consideration), and an invoice issued. The importance of issuing an invoice cannot be overlooked. Sometimes it is necessary to advise a client that they must properly issue a tax invoice before their money can be pursued further.

The first step in Debt Recovery is a well worded letter of demand. It is helpful to recommend a client issue a demand of their own. This puts the debtor on notice that they are seriously overdue and foreshadows the matter being passed to a solicitor. After the client’s demand a formal letter of demand should come from the solicitor’s office. The Debt Recovery bundle download includes three letters of demand and a Statement of Claim so you can take the matter to court if the debt is not paid. Included in the download:


Document Description  


An updated checklist includes points on what to cover before granting credit to determine if the client is creditworthy or if the debt is recoverable. These will assist in advising clients and will serve as a reminder to the practitioner on what to look out for when assessing the credit worthyness of new clients (and reassessing existing clients).

Letter of Demand 1

An initial letter of demand that is polite and assumes there may have been an oversight in not paying. Allows 7 days for payment.

Letter of Demand 2

A more threatening letter that mentions legal proceedings and gives 7 days to pay.

Letter of Demand 3

Gives a further 7 days to pay before proceedings are commenced. Outline costs of proceedings and that these may be added to the debt.

Statement of Liquidated Claim

The UCPR form into which the various forms of pleading may be included.

Statement of Claim interest calculator

An excel spreadsheet that calculates interest. Enter two dates and an interest rate. The calculator will work out the interest between those dates and the amount of interest per day.

Form 1

Form required to be affixed to the Statement of Claim when served outside NSW.

Pleading – claim for work done

Pleading under a simple contract where work has been done and invoiced but not paid.

Pleading – Finance Company

Recovery of Personal Loan made by Finance Company.

Letter to process server

Letter enclosing Statement of Claim with instructions to locate debtor and serve documents.

Letter serving statement of claim

A brief covering letter for service of statement of claim on individual or company.

Notice of Motion – Default Judgment for Liquidated Claim

Form 38 Notice of Motion Default Judgment for Liquidated Claim NSW Uniform Civil Procedure Rules (UCPR 16.3, 16.6) is used in civil proceedings in the Supreme, District and Local Courts.

Notice of Motion – Default Judgment for Unliquidated Damages

Form 39 Notice of Motion Default Judgment for Unliquidated Damages NSW Uniform Civil Procedure Rules (UCPR 16.3, 16.7) is used in civil proceedings in the Supreme, District and Local Courts.

Letter to Debtor – judgment obtained

Letter to Debtor – judgment obtained.

Letter to client advising judgment entered

Letter to client advising judgment entered.

Notice of intention to file notice of ceasing to act

UCPR form required by the Local Court to be filed and served before a solicitor may file a Notice of Ceasing to Act
Notice of ceasing to act

UCPR form required by the Local Court to be filed and served before a solicitor may cease to act for a client.

Debt Recovery Bundle

Debt Recovery Bundle

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Debt collection services (outsourcing) 

Download your own Debt Recovery Letters – save costs and keep track of your debts.

If the debt is not recovered after friendly reminders, informal negotiations and a letter of demand, you might decide to engage a debt collection service. This is a business that tries to recover the money for you for a fee. Using a debt collection service goes one step further than sending a letter of demand because it signals to the hirer that you have decided to hand the matter over to professionals. This could further strain your business relationship with the hirer, however sometimes it may be more important to get the money you are owed.

Traditional debt recovery methods

Traditionally, a debt collection service will send a ‘letter of demand’ to the debtor on its letterhead, demanding that the debt is paid by a particular date or legal action may be taken. If necessary, the service will issue a second, ‘final’ letter of demand or follow up with a ‘phone demand’. If unsuccessful, you can engage the service to take legal action on your behalf. The fee you will pay is referred to as a commission. Most commission rates for debt collection services vary  between 5 and 30 per cent of the value of the debt.

Debt purchasing or debt buying

In some cases, you can sell the debt to a debt collection service for a small percentage of the debt amount. The service will then pursue the debtor to recover part or all of the money owed but you will not be entitled to any of the money if recovered. You may wish to consider this option when you have written off a debt.

Online debt recovery

Some debt collection services or lawyers provide online debt recovery services. Usually, these services require you to type in the information about the debt you want to recover (such as the hirer’s business name, address, amount of debt, what the debt was for). The service then generates a letter of demand for a fee that you pay online. The letter is usually sent to the hirer for you.


  • It’s fast and easy.
  • It’s relatively cheap (often a fixed fee paid by credit card online).
  • The letter is usually on the letterhead of a lawyer or debt collection service so it may have more of an impact than an ordinary letter.


  • You have little control over what is written.
  • You probably won’t get advice as part of the service.
  • There are the usual dangers of using internet services, such as fraud and insecure payments.
  • It could damage your future business relationship with the hirer.  
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