A statutory demand is a very effective method of getting paid where the debtor is a company.
A statutory demand must be issued in the form prescribed under the Corporations Law and be supported by an affidavit in the correct form by the creditor or one of it directors.
The statutory demand gives the debtor company 21 days within which to pay or compromise the debt, and if it does not do so the company is presumed to be insolvent. This then allows the applicant to immediately apply to the Supreme Court for an order for the winding up of the company, which will be difficult to resist.
If your company has received a statutory demand contact us urgently. We only have 21 days within which to prepare an application to Court to set it aside. The Court rules and the forms are quite complex and procedures must be properly followed to be effective.
In response to the Covid 19 crisis, the Federal Government have effectively eliminated the prohibition on insolvent trading, until 30 September 2020. They have also extended the time period to respond to a Statutory demand to 6 months, but procedural problems with this relief are appearing. Also the threshold claim for issuing a Statutory Demand has increased from $2,000 to $20,000 . Please call us if you find your self in a position of insolvency. Also be alert; your customers may now be permitted to trade while insolvent for longer than before, running up a lot more debts, and taking good businesses, like yours with them when they go down. Credit control and debtor management is now more critical than ever. Call us now to advise, and assist in dealing with recalcitrant debtors.
While a statutory demand is an effective debt collecting procedure, we urge great caution in using it for any debt where there is a genuine dispute. Such disputes will inevitably end up in the Supreme Court which is a very expensive jurisdiction if the amounts involved are relatively small.
Because of the dramatic effect of a statutory demand, there have been a great many court cases. At P.M. Lee & Co. Lawyers we are familiar with those cases and decisions and they provide us useful guidance in using this procedure, and helping you to avoid the pitfalls that await the unwary.
At P.M. Lee & Co. Lawyers we will help you use this effective business tool as part of your debt recovery armoury.
If you have received a statutory demand contact us urgently for assistance.
Call us today Peter Lee or Simon Wats0n on +61 3186 6666 or email firstname.lastname@example.org for any enquiries.