Notice of legal action – being sued for the recovery of an unpaid debt

If you owe a debt to someone and have not paid it by the requested date, that person (called a creditor) might choose to sue you. In this context, being sued is when a creditor takes court action against you.

A court can make an order that you owe a debt. This debt is then called a judgment debt.

You will have to pay:

the debt
the creditor’s legal costs
interest on the debt.

Being sued can end up costing you much more money than your original debt.

A court order gives a creditor options to get money back, for example, a creditor can apply to have money taken from your wages or to take and sell things you own, including your home.

How do I know I have been sued

Usually a creditor will send a letter of demand before starting action to sue you. You can read more about this on the Creditor notices and letters of demand page.

Some creditors try to make their letters look like official court documents to make you think court action has started. This is illegal. Information about letters of demand are available from Legal Aid NSW.

Get legal help if you are not sure if you have a letter of demand or a court document, as you may have to act fast.

Court documents and forms

If your court appointment is in the Magistrates’ Court of Victoria, creditors start the legal process by sending you a Complaint Form 5A.

What the Complaint form will say

The Complaint Form will say how much money the creditor wants from you. This is called the claim.

Claims of up to $100,000 are heard by the Magistrates’ Court of Victoria. You can find out more by visiting their website page.

The complaint will also say you need to file a defence within 21 days or risk having a court order made against you. Visit Filing a defence for more information.

In the County and Supreme courts the document is known as a writ and is headed ‘Form 5A’. Both of these courts can hear claims for any amount of money over $100,000.

No matter which court is used, the document must show:

a court reference number
the date the document was filed with the court
what you need to do to respond.

How will I get the court forms?

A complaint will be delivered (served) by an authorised person working for the creditor.

The complaint can be delivered to you almost anywhere, for example, at home or work.

How you get the complaint will depend on the court involved:

Magistrates' Court – the complaint can be given to you, or can be given to someone else at your home or work as long as they are over 16 years old.
County and Supreme courts – the writ must be given to only you. If you do not accept it, it can be placed down in your presence and the person delivering it can explain what it is. If you avoid being served, the creditor may get permission to give it to you in some other way.

What should I do when I get a court form?

If you ignore these forms, you will lose important rights.

You should:

read the complaint or writ carefully
find out where to get support if you need it
you can also speak to us if your matter is urgent.

You may have a defence (a reason why you have not paid the debt) but you need to act fast as you only have a short time to file a defence.

Check the complaint form for this information. In the Magistrates’ Court you have 21 days, in other courts it can be less.

Can I still pay the debt off?

You can still pay the debt off after you have received a complaint.

However the creditor will probably also want you to pay their legal costs, so you will need to negotiate with the creditor about how you will pay.

Once this is done, you should then:

make a written agreement with the creditor. You need to do this before any actual court hearing begins.
ask your lawyer to make sure the creditor files a Notice of Discontinuance with the court. This will stop the court action against you.

What can happen at court