What is a statutory demand? A statutory demand is a kind of written warning from a creditor. It will state that if you don’t pay your debt or come to another arrangement that’s acceptable to the creditor, they may start court proceedings to make you bankrupt.
Is a letter of demand a statutory demand?
A Creditor’s Statutory Demand is a letter of demand served by a creditor to a debtor company in an attempt to recover debt owed to a creditor.
How do you withdraw statutory demand?
Can the creditor withdraw the statutory demand? It may be possible to persuade the creditor to withdraw the statutory demand. To be effective, the statutory demand must be unequivocally withdrawn in writing. If the statutory demand is not withdrawn in those terms it remains in force.
What happens if I dont respond to a statutory demand?
If you do not respond in 21 days, your company will be presumed to be insolvent. This could mean that within a few months of the demand being served, the court can appoint liquidators to your company. In principle, a statutory demand should only be issued if the existence of the debt is unambiguous and undisputed.
How long is a statutory demand valid for?
How long is a statutory demand valid for? If you don’t comply with a statutory demand or set it aside, the creditor has four months to petition for your bankruptcy. If a creditor wants to use a statutory demand that’s more than four months old, they’ll need the court’s permission.
Does a statutory demand need to be filed?
The period for compliance with a Statutory Demand 2.6 Any application under s459G of the Corporations Act to set aside a Statutory Demand must be filed with the Court and served on the creditor within 21 days after service of the demand.
Can a demand letter be sent via email?
Use certified mail. If you do end up in small claims court, you can use the return receipt to counter any claim that your opponent didn’t receive the demand letter. Again, many individuals and businesses use email almost exclusively now and it’s fine to email all communication as long as you receive a response.
How long are statutory demands valid for?
Does a statutory demand need to be personally served?
A statutory demand must be served in person by either handing it to the individual concerned, or else leaving it at the registered office or with the company director or company secretary. It can only be sent by post if it is not possible for the notice to be delivered in person.
How long is a Creditors statutory Demand valid for?
The presumption of insolvency is only valid for 3 months from 21 days after the date of service, after that date the presumption lapses or becomes stale and no longer applies. Therefore a winding up application must be made prior to that date.
On what grounds can you set aside a statutory demand?
You can apply to have it set aside for any of the following reasons:
you have a genuine dispute with your creditor about the debt – for example, if your debt is for goods you didn’t get.
you think the creditor owes you at least as much money as you owe them, called a counterclaim.
What are the grounds for an application under s459p?
1.2 The most common basis for an application under s459P is that the subject company has failed to comply with a Statutory Demand and is presumed to be insolvent (s459C (2) (a)). 1.3 A summary of the Statutory Demand procedure and the presumption of insolvency is set out below.
What happens when a company is deemed insolvent under section 459?
approach the Supreme Court to have the Demand set aside. If the company does not comply with the demand, then under section 459C (2) (a) of the Corporations Act 2001 the company is deemed insolvent. The insolvent company is then at risk of the court appointing a liquidator to commence winding up procedures.
When to use s459a of the Corporations Act?
It is governed by s459A of the Corporations Act, and can be a useful option when the amount owing is $2,000.00 or greater. Once served, the debtor company has 21 days to satisfy the debt (or make payment arrangements between the parties) or to make application to the Court to have the demand set aside.
Where to find form 509h for statutory demand?
Form 509H is located at schedule 2 of the Corporations Regulations 2001 (CTH) . If you are drafting a statutory demand yourself then you need to get a copy from there. A statutory demand contains a header, six (6) paragraphs, a schedule, a signing section, and some notes.