A Very Important Three Weeks: You’ve received a Statutory Demand

If you have received a statutory demand, you must respond to it within 21 days. However, if you wish to dispute the debt either partially or in full, then you must apply for a Court order to set aside the statutory demand.

Statutory demands are notorious in the legal world because of their vulnerability to being set aside. You may be able to set aside a statutory demand if:

• You have a genuine dispute regarding the substance of the debt or the events surrounding the debt; or
• The creditor who served the statutory demand owes your company some money (an offsetting), and the balance of the total debt falls below $2000 (which is the smallest claim which can be enforced with a statutory demand); or
• There is a defect in the form of the statutory demand that would render it inoperable or manifestly unjust.

If you do not act immediately to set aside a statutory demand, your company can later be presumed to be insolvent and subsequently wound up on the application of a creditor or by ASIC. As such, you should seek legal advice immediately upon receiving a statutory demand.

If you have further questions, please contact us at frank@franklaw.com.au.

This is not legal advice.