How can I recover a debt in 2021?

How can I recover a debt in 2021?

In 2020 the Federal Government introduced temporary changes which impacted some of the ways in which a creditor could recover debts owing by a debtor.

With the majority of these temporary measures having come to an end on 31 December 2020, you may be wondering what your options are to pursue a debt owing in 2021?

Debts owed by an individual
If the debt is owed by an individual, you are able to commence proceedings to obtain a judgment ordering the person to pay the debt. The appropriate Court will depend upon where you live and the value of the debt owing.

Once you have obtained a judgment you can pursue the following options to enforce payment of the debt:

1. bankruptcy proceedings;
Bankruptcy proceedings are commenced by issuing a bankruptcy notice. Once the bankruptcy notice has been served the debtor has 21 days to respond. If there is no response, you can proceed to present a creditors petition, which is where you ask the Court to make the debtor bankrupt.

If a debtor is made bankrupt, a qualified professional called a ‘trustee in bankruptcy’, takes over an individual’s finances for a period of time to resolve all of the individual’s outstanding debts.


  • Note: as of 1 January 2021, the threshold to issue a bankruptcy notice was permanently increased from $5,000.00 to $10,000.00.

2. garnishee orders;
You can obtain an order from the Court to have money automatically deducted from a debtor’s bank account(s), wages or salary, or seek payment of your debt from anyone else you can determine owes money to the debtor. For this to occur, you will need to make an application to the Court.

3. writs of execution / warrant for the seizure and sale.
If you are aware that a debtor is the owner of either real or personal property (such as a motor vehicle) you can apply to the Court to seek that the sheriff seizes and sells his/her property in order to satisfy the debt.

Debts owed by a company
If the debt is owed by a company you can commence proceedings to obtain a judgment, but it is not necessary.
There is the ability to issue the company with a statutory demand seeking payment of the debt so long as the debt is above the ‘statutory minimum’.


  • Note: as at 1 January 2021, the threshold to issue a statutory demand is $2,000.00.

Similar to a bankruptcy notice, a company served with a statutory demand has 21 days to respond. If no response is received, then you can make an application to the Court for an order winding up the company in insolvency.

If the company is ‘wound up’, also known as being placed into liquidation by the Court, a qualified professional called a ‘liquidator’ takes control of the company to resolve its outstanding debts before closing the company.

This can be an effective tool, as often a company will make payment of a debt in response to a statutory demand to avoid being wound up.

If you are owed or owe a debt, our experienced insolvency and debt recovery team are here to assist and can give an assessment of the best solution tailored to your individual circumstances.
Do not hesitate to contact any of our offices.

Article prepared by: Matt Gauci – Partner, & Jessica Egger Lawyer, Sydney