DebtCallEvery business owner hits it eventually: an invoice that's well overdue, and a customer who has stopped responding – or worse, who has looked you in the eye and said they're not paying. It's frustrating, and it can feel personal. But there's a calm, methodical way through it, and following the steps in order gives you the best chance of recovering the money without pouring good time and cash after bad.
First, work out why they're refusing
"Won't pay" comes in three flavours, and each needs a different response. Some customers dispute the debt – they claim the work was faulty, the amount is wrong, or they never agreed to it. Some can't pay – they have the will but not the cash. And some simply won't pay, betting that you won't bother chasing. Before you escalate, figure out which one you're dealing with, because the approach differs. A genuine dispute may need evidence and a conversation; a cash-flow problem may be solved with a payment plan; a stonewaller usually just needs to see that you're serious.
Get your ground in order
Before you spend a dollar chasing, confirm three things. First, that your paperwork stacks up – the contract or terms, the invoice, and any record of the goods or services delivered. Second, that you're pursuing the right legal entity – check the exact business name and ABN, because chasing the wrong entity, or one with no assets, is a common reason recovery fails. Third, that the debt is still within the limitation period (generally six years for a simple contract debt in NSW, Victoria and Queensland). This groundwork is what makes every later step stronger.
Escalate in a sensible order
Debt recovery works best as a ladder, not a leap. Start with a clear reminder – a firm but civil note restating what's owed and by when. If that's ignored, the next rung is a formal letter of demand: a written demand stating exactly how much is owed, what it's for, and the deadline to pay. This is the step that changes the temperature. A letter of demand puts the debt in formal terms and signals you're prepared to act, and a great many debts are paid at this point precisely because the debtor realises the free ride is over.
A letter of demand carries far more weight when it comes from a law firm rather than another email from you. It's harder to dismiss, harder to ignore, and it tells the debtor the matter has moved beyond internal chasing. This is what DebtCall does: as a law firm, it issues a formal letter of demand for the Pre-Court Fee, delivered by email and SMS, followed by a few automated reminders if the debt stays unpaid. Payment goes straight to your own account – DebtCall never handles your debtor's money – and it's messages only, with no phone chasing or field agents.
Leave the door open to a resolution
Refusal isn't always the final word. A debtor who can't pay in full today may well be able to pay over time, and a sensible payment plan or short deferral often recovers more, faster, than a fight does. It's worth giving the debtor a structured way to respond – to explain their situation and propose terms you can accept or decline. DebtCall builds this in: the debtor can reply and propose a payment plan, deferral or settlement, and you stay in control of whether to agree. Many matters resolve right here, without anyone going near a court.
If they still won't budge
If the debt remains unpaid and the debtor won't engage, court action is the backstop. As a law firm, DebtCall can commence proceedings for you if you choose to escalate, with those costs quoted separately – but the decision is always yours. The point of following the ladder is that by the time you reach this rung, you've resolved most debts more cheaply, and you're only spending on litigation where it's genuinely warranted.
The worst response to a refusal is no response at all. A debtor who refuses is often testing whether you'll act. A prompt, formal, professional step – starting with a proper letter of demand – is usually all it takes to get the conversation, and the payment, moving.
This article is general information only and is not legal advice.
Owed money? Start a case with DebtCall for the Pre-Court Fee – a law-firm letter of demand by email and SMS. For advice about your own situation, contact us, or learn more about DebtCall.