It is essential that you act immediately if you receive a Creditor’s Statutory Demand. DO NOT delay in seeking legal advice because the 21 day time limit is strict and it may have already commenced before you have become aware of the existence of the Creditor’s Statutory Demand. In other words, there is every chance that you will not have a full 21 days to work with.
You must as quickly as possible, establish the following:
WHEN – You need to be very specific as to when the Creditor’s Statutory Demand was served upon your company’s registered office. If it was served on your accountant, make sure that the date of receipt is date stamped on it. If you received it another way, such as a street post box, then keep the envelope as it may be possible to use the Australia Post tracking number to determine the delivery date and time.
WHY – The date of service is extremely important, because you have 21 days from the date of receipt to act. The 21 day time frame is not negotiable and how much time you have left dictates your options.
Once you have done that you need to consider what needs to be done next.
WHAT – Your options include the following:
- Pay it in full and satisfy the demand;
- Respond in writing that the debt is disputed and include evidence in support of that assertion and demand that the Creditor’s Statutory Demand be withdrawn;
- File an application with the court to have the Creditor’s Statutory Demand set aside.
OR ELSE: If none of 1, 2, or 3 occur, then after 21 days have expired, a presumption that your company is insolvent will automatically come into existence which the creditor who issued the Creditor’s Statutory Demand may then rely upon in an application to the court to have your company wound up.
HOW – Call us on 07 3225 5600 as soon as possible to discuss the best option for you and your company. Generally speaking, the sooner you can act the better (and more cost effective and commercial) the outcome.