- If a debt is not paid and all the usual actions have been taken to pursue it, a creditor may serve a statutory demand for payment after a court judgment confirms the debt is owed. Key points to keep in mind are:
- A statutory demand can only be issued to a corporate debtor if the debt or debts owed total more than $2,000 and there is no genuine dispute about the existence of the debt or debts.
- The presumption of insolvency most commonly arises from the failure to comply with a statutory demand.
- If you are unable to pay, you are liable to receive a winding up application.
- To comply with this demand you need to pay the debt within 21 days.
- If the statutory demand is disputed you must make an application to the Supreme Court or the Federal Court to set aside the statutory demand.
It’s important to act immediately if you receive a statutory demand. The courts strictly enforce the 21-day timeframe and you cannot get an extension of time. If you have received a statutory demand, contact Corporate Guardian to discuss what it means and what your options are.
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