Home – New Forums Money matters Creditor’s Statutory Demand – how to get paid fast!

  • This topic is empty.
Viewing 15 posts - 1 through 15 (of 19 total)
  • Author
    Posts
  • #977959
    hmirz
    Member
    • Total posts: 69
    Up
    0
    ::

    Many fellow flying soloists have been asking me whether there is an effective and inexpensive way of getting debts of more than $2,000 owing to them paid by corporate debtors! The answer is “Yes, there is!” :D

    I thought it worthwhile that all soloists on this site should have the advantage of being able to share in some of the legal know-how and knowledge I have been imparting to others on this site. Let’s face it, it is such a common issue that we at some time unfortunately in running our businesses will confront the problem of debtors paying slowing or heaven forbid…not at all!!

    The legal avenue is called a “Creditors’ Statutory Demand”. The effect of this demand is that it is essentially a threat to the corporate debtor to pay-up or face being wound-up!

    1) The demand is set out in a particular legal format (yes, legalese you might say!)

    2) The demand requires the corporate debtor to pay within 21 days (otherwise the company is deemed to be insolvent – OUCH!!! and you the creditor can waddle off to the Supreme Court to apply to wind up the company

    3) The debt owing which is the subject of the demand must be $2,000 or more – if the debtor company is of the view that it does not owe the money, its only avenue is to bring an Application in the Supreme Court to get the Statutory Demand set aside (the debtor company has to do this within 21 days of being served with the Statutory Demand, it cannot seek an extension of time beyond this 21 day period)

    So if you are clearly owed a debt of $2,000 or more (and it is unlikely that the debtor company can or will bring arguments about the debt being owed in the first place or setting off the debt), the Creditor’s Statutory Demand is a seriously quick and efficient way to collect money which is rightfully yours!

    For more information contact me at [email protected], check out my website for my legal videos and material at http://www.abclegal.com.au or give me a buzz.
    Cheers,
    Hamid Mirza
    Barrister-at-Law & Registered Migration Agent

    #1103670
    MatthewKeath
    Member
    • Total posts: 3,184
    Up
    0
    ::

    Is this Australia wide?

    And, can it be used for businesses other than a corporation?

    Can a million dollar corporation really be wound up over a $2000 debt?

    #1103731
    MatthewKeath
    Member
    • Total posts: 3,184
    Up
    0
    ::

    Is this Australia wide?

    And, can it be used for businesses other than a corporation?

    Can a million dollar corporation really be wound up over a $2000 debt?

    #1103672
    hmirz
    Member
    • Total posts: 69
    Up
    0
    ::

    Answers:

    1) Yes, Australia-wide it is a remedy having its legislative basis in the Corporations Act, a Commonwealth piece of legislation;

    2) Companies and corporates only note however, many trading trusts are set up with a corporate trustees so the procedure may apply to them, depends really upon identification of the appropriate “debtor entity”;

    3) Yes, it works against the biggest of companies, serve one of these big companies with a statutory demand and you will immediately get a response from their in-house legal departments. By the same token, if you are a director of company (big or small) and you are served with one of these, don’t delay, act with speed!

    Cheers,
    Hamid Mirza
    Barrister-at-Law & Registered Migration Agent
    http://www.abclegal.com.au
    [email protected]

    #1103733
    hmirz
    Member
    • Total posts: 69
    Up
    0
    ::

    Answers:

    1) Yes, Australia-wide it is a remedy having its legislative basis in the Corporations Act, a Commonwealth piece of legislation;

    2) Companies and corporates only note however, many trading trusts are set up with a corporate trustees so the procedure may apply to them, depends really upon identification of the appropriate “debtor entity”;

    3) Yes, it works against the biggest of companies, serve one of these big companies with a statutory demand and you will immediately get a response from their in-house legal departments. By the same token, if you are a director of company (big or small) and you are served with one of these, don’t delay, act with speed!

    Cheers,
    Hamid Mirza
    Barrister-at-Law & Registered Migration Agent
    http://www.abclegal.com.au
    [email protected]

    #1103674
    Cooke Consulting
    Member
    • Total posts: 122
    Up
    0
    ::

    Hi guys,

    Just my 2c worth here.

    In my opinion you would only want to consider going down this path as a last resort and only if there is no ‘genuine dispute’.

    If the defending party can establish even the slightest whiff of a genuine dispute it could very well be set aside & if that happens court costs maybe incurred to the creditor.

    However, with that said I do agree with Hamid. It’s certainly a reasonable path to take, just make sure all your ducks are in a row first….then check them again!

    Regards,
    James

    #1103735
    Cooke Consulting
    Member
    • Total posts: 122
    Up
    0
    ::

    Hi guys,

    Just my 2c worth here.

    In my opinion you would only want to consider going down this path as a last resort and only if there is no ‘genuine dispute’.

    If the defending party can establish even the slightest whiff of a genuine dispute it could very well be set aside & if that happens court costs maybe incurred to the creditor.

    However, with that said I do agree with Hamid. It’s certainly a reasonable path to take, just make sure all your ducks are in a row first….then check them again!

    Regards,
    James

    #1103676
    victorng
    Member
    • Total posts: 626
    Up
    0
    ::
    Cooke Consulting, post: 115029 wrote:
    If the defending party can establish even the slightest whiff of a genuine dispute it could very well be set aside & if that happens court costs maybe incurred to the creditor.

    James’ warning is very important. I will generally only use a statutory demand for a judgment debt – i.e. where we have a court judgment in favour of the creditor. It must be 100% clear that the debt is owed and there is no possibility that it can be disputed.

    A statutory demand is not a quick and easy way to collect ‘everyday’ debts. If the debtor can raise (not prove, simply raise) a hint of a genuine dispute – e.g. I wasn’t happy with the service, I thought x was included in the quote, they didn’t deliver on time, etc etc – then the statutory demand will be set aside and you’ll end up wearing your costs and the debtor’s costs which can leave you up to $10k+ out of pocket.

    Cheers,
    Victor

    #1103737
    victorng
    Member
    • Total posts: 626
    Up
    0
    ::
    Cooke Consulting, post: 115029 wrote:
    If the defending party can establish even the slightest whiff of a genuine dispute it could very well be set aside & if that happens court costs maybe incurred to the creditor.

    James’ warning is very important. I will generally only use a statutory demand for a judgment debt – i.e. where we have a court judgment in favour of the creditor. It must be 100% clear that the debt is owed and there is no possibility that it can be disputed.

    A statutory demand is not a quick and easy way to collect ‘everyday’ debts. If the debtor can raise (not prove, simply raise) a hint of a genuine dispute – e.g. I wasn’t happy with the service, I thought x was included in the quote, they didn’t deliver on time, etc etc – then the statutory demand will be set aside and you’ll end up wearing your costs and the debtor’s costs which can leave you up to $10k+ out of pocket.

    Cheers,
    Victor

    #1103678
    Linky402
    Member
    • Total posts: 4
    Up
    0
    ::
    victorng, post: 115036 wrote:
    James’ warning is very important. I will generally only use a statutory demand for a judgment debt – i.e. where we have a court judgment in favour of the creditor. It must be 100% clear that the debt is owed and there is no possibility that it can be disputed.

    A statutory demand is not a quick and easy way to collect ‘everyday’ debts. If the debtor can raise (not prove, simply raise) a hint of a genuine dispute – e.g. I wasn’t happy with the service, I thought x was included in the quote, they didn’t deliver on time, etc etc – then the statutory demand will be set aside and you’ll end up wearing your costs and the debtor’s costs which can leave you up to $10k+ out of pocket.

    Cheers,
    Victor

    Hi Victor,

    This is my first post, so excuse any mistakes I may make. I am currently owed approx.$100k from a very slippery character. I don’t believe that he has a “genuine dispute” but merely does business by not paying people. However, It appears that if he presents a case to muddy the waters I am afraid the courts may take the easy route, not analyse whether or not his concerns are genuine and dismiss my Demand…leaving me with costs.
    Following this line, is it better to obtain a court judgement first and then, if needed, move to a CSD?
    Any comments would be appreciated.
    Thanks

    #1103739
    Linky402
    Member
    • Total posts: 4
    Up
    0
    ::
    victorng, post: 115036 wrote:
    James’ warning is very important. I will generally only use a statutory demand for a judgment debt – i.e. where we have a court judgment in favour of the creditor. It must be 100% clear that the debt is owed and there is no possibility that it can be disputed.

    A statutory demand is not a quick and easy way to collect ‘everyday’ debts. If the debtor can raise (not prove, simply raise) a hint of a genuine dispute – e.g. I wasn’t happy with the service, I thought x was included in the quote, they didn’t deliver on time, etc etc – then the statutory demand will be set aside and you’ll end up wearing your costs and the debtor’s costs which can leave you up to $10k+ out of pocket.

    Cheers,
    Victor

    Hi Victor,

    This is my first post, so excuse any mistakes I may make. I am currently owed approx.$100k from a very slippery character. I don’t believe that he has a “genuine dispute” but merely does business by not paying people. However, It appears that if he presents a case to muddy the waters I am afraid the courts may take the easy route, not analyse whether or not his concerns are genuine and dismiss my Demand…leaving me with costs.
    Following this line, is it better to obtain a court judgement first and then, if needed, move to a CSD?
    Any comments would be appreciated.
    Thanks

    #1103680
    Cooke Consulting
    Member
    • Total posts: 122
    Up
    0
    ::

    Hi Linky402,

    Based on what you have written I would be looking for a court judgement first then if needed look at the possibility of a Statutory Demand.

    My advice: Is make sure that you have clearly documented your collection attempts as well as any reports from a Mercantile Agent that will help lend credence to your case if the debtor has not been forthcoming.

    With regards to your comments about the debtor not having a “genuine dispute” – irrespective whether it is or not – you need to make it very clear what the dispute was, what correspondence you have had with the debtor about it and how this was rectified by you.

    The point being here if you want your $100k you need to ensure that the debtor has not got a leg to stand on or there are any holes in your case that the debtor could slip through.

    If you want to have an informal chat about it – feel free to get in contact. Certainly if I cannot help you I most certainly know Solicitors that may be able to assist you.

    All the best

    #1103741
    Cooke Consulting
    Member
    • Total posts: 122
    Up
    0
    ::

    Hi Linky402,

    Based on what you have written I would be looking for a court judgement first then if needed look at the possibility of a Statutory Demand.

    My advice: Is make sure that you have clearly documented your collection attempts as well as any reports from a Mercantile Agent that will help lend credence to your case if the debtor has not been forthcoming.

    With regards to your comments about the debtor not having a “genuine dispute” – irrespective whether it is or not – you need to make it very clear what the dispute was, what correspondence you have had with the debtor about it and how this was rectified by you.

    The point being here if you want your $100k you need to ensure that the debtor has not got a leg to stand on or there are any holes in your case that the debtor could slip through.

    If you want to have an informal chat about it – feel free to get in contact. Certainly if I cannot help you I most certainly know Solicitors that may be able to assist you.

    All the best

    #1103682
    JGF
    Member
    • Total posts: 73
    Up
    0
    ::

    This is a great thread, very helpful info here that is not common knowledge to all of us without legal experience.

    On another note, how much information needs to be provided in debt collection cases (and Creditor’s Statutory Demand) as far as a supply contract or agreement goes and how solid does the contract need to be?

    Thanks Guys.
    John

    #1103743
    JGF
    Member
    • Total posts: 73
    Up
    0
    ::

    This is a great thread, very helpful info here that is not common knowledge to all of us without legal experience.

    On another note, how much information needs to be provided in debt collection cases (and Creditor’s Statutory Demand) as far as a supply contract or agreement goes and how solid does the contract need to be?

    Thanks Guys.
    John

Viewing 15 posts - 1 through 15 (of 19 total)
  • You must be logged in to reply to this topic.