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RECEIVED A STATUTORY DEMAND?

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This is a legal matter with a specific timeline (21 days)

DO NOT ignore a Statutory Demand!

The next step will be a winding-up application against your company. You do have options.

A Creditor's Statutory Demand is a warning from a creditor and states that if you don't pay your debts or come to an arrangement that the creditor agrees to, they can begin the process of court proceedings to make you bankrupt.

This is a legal matter with a specific timeline (21 days), so DON'T ignore a Statutory Demand! The next step will be a winding-up application against your company. You do have options.

What is a Form 509H - Creditor’s Statutory Demand – s459E of the Corporations Act 2001 (“the Act”)?

  • A Statutory Demand is a creditor’s formal, written request requiring a company to pay a debt within 21 days of service.

  • This a strict legal process governed by the Act.

  • A Statutory Demand must be in the prescribed form (referred to as a Form 509H) and the other requirements are set out in s459E of the Act.

  • The total debt amount must exceed $2,000.00 and the debt must be due and payable at the time of the demand, also there should not be a genuine dispute about the debt.

  • A Statutory Demand does not have to be filed with the Court, but must be served on the debtor with correct information, such as the correct address.

  • You should NEVER ignore a Statutory Demand. Failure to comply is the most common basis for an application to wind up the debtor company.

  • If you are unable to pay the Statutory Demand in full or fail to comply/dispute the Statutory Demand within 21 days, you may potentially be at risk of Insolvent Trading.

Do you need more information?

Tell us your circumstances with an obligation free phone call and our qualified professionals will provide you with a tailored solution. We will help you with;

 

  • Disputing the Statutory Demand within 21 days

  • Negotiate and arrange a payment plan

  • Negotiate and arrange a short-term finance

What are your options for the Statutory Demand?

 

When you act within 21 days

 

  • You may accept the Statutory Demand reluctantly without protest and pay the claim amount in full.

  • You may attempt to contact the creditor and negotiate a settlement;

  • You may apply to the Court for an order setting aside a statutory demand served on the company under s459G; and if you are unable to pay the Statutory Demand, seek immediate advice from highly qualified professionals.

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If you do not act within 21 days​

  • The creditor will apply to the court to wind up your company.

  • The creditor may rely upon the expired Statutory Demand as a presumption of insolvency and apply to the Court to wind up your Company.

What are the Grounds for a Statutory Demand to be set aside by Court?

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  • There is a genuine dispute as to the debt (s459H(1)(a)

  • The company has an offsetting claim (s459H(1)(b)

  • There is a defect in the demand that will cause substantial injustice unless the demand is set aside (s459J(1)(a), or

  • For some other reason (s459J(1)(b).

  • Once you have applied to set aside the Statutory Demand, the time to comply with the demand will automatically be extended pending on the determination by the Court.

National Hotline 02 9135 4199

Samson Business Advisors Pty Ltd

Level 2, 9 Phillip St Parramatta NSW 2150

A Subsidiary of Chifley Advisory Pty Ltd

© 2019 by Samson Business Advisors Pty Ltd. ABN 77 630 927 374