Like other demands, a statutory demand is sent to a debtor company (someone that owes you). While it can help to recover your money, it is not really designed to be a debt recovery tool. It can, however, become a real incentive for your debtor to pay their debts.
Let’s look at some basic information about statutory demands and the benefits and risks that are associated with them.
The threat of insolvency if a debtor company does not comply with a statutory demand can be a great motivator to pay the bet.
This often opens communication between the parties.
As noted, despite the demand process not being designed to be a debt recovery tool, it can prove to be very effective!
A statutory demand can be a faster and far more efficient way to wind up proceedings than going to court which can become very lengthy and expensive.
The primary risk is that a debtor company can make an application to ‘set aside’ the statutory demand. If this is a possibility, the creditor is usually notified in advance and has an opportunity to withdraw the statutory demand.
If the debtor company does make an application to set aside the statutory demand and is successful, they may also entitled to recover their legal costs of the application.
As with any demand from one party to another, there are always risks and benefits to be considered. We encourage both sides to discuss options with us to ensure an outcome that is fair and equitable for all concerned.
Fill in the form below and one of our team will be in touch. You can also phone 1300 149 140 during standard business hours.
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