Statutory Demands and Winding Up
When a creditor has obtained judgment against a debtor, or there is simply an outstanding debt that cannot be genuinely disputed then a statutory demand can be used to enforce that debt. The debtor has 21 days after being served to file and serve an application to set aside the demand (with affidavit in support) or else that company will be presumed to be insolvent. Once there is a presumption of insolvency the debtor can potentially be wound up in insolvency.
A statutory demand is typically prepared by a lawyer who understands the requirements under the Corporations Law with respect to its preparation and service.
The idea behind sending a statutory demand is to force the debtor to pay up or to dispute the debt.
Let Us Help You:-
- enforce a judgement against a debtor by preparing and serving a statutory demand.
- set aside a statutory demand if you are an alleged debtor and there is a genuine dispute about the debt (or there is a set off);
- understand that you only have 21 days to file and serve your application to dispute a debt and that there can be no extensions so that if you leave it too late then there is a serious risk that the debtor company can be wound up in insolvency;
- understand how the 21 day period is calculated at law;
- know how long the presumption as to insolvency operates in respect of a statutory demand that is not set aside;
- appreciate that for Federal Court matters "genuine steps" must be taken even for applications to set aside a statutory demand;
- understand the technical requirements for preparing a such a demand including matters such as the need for the debt to be $2,000 (or more), the need for it to be in writing, and so on;
- learn about the requirements for the "genuine dispute" test and whether or not it is a demanding hurdle;
- see if cross-examination will be permitted to a limited extent to determine whether there is a genuine dispute and/or set off claim;
- pursue the windup for failure to comply with a statutory demand where there is a failure to comply with a statutory demand including preparation of the originating process, affidavit, notification to ASIC, consent of liquidator and publication of the notice of application;
- pursue the windup on the basis of just and equitable grounds where there are difficulties in serving the statutory demand;
- prepare a proof of debt for you once the company is being wound up.
Talk to a Dispute Lawyer today!
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