How a Creditor’s Statutory Demand can help you to be paid?

How a Creditor’s Statutory Demand can help you to be paid?

None of us enjoys sending payment reminder notices, let alone repeatedly. If you are not being paid, Ballantyne Law Group's Commercial Law team can help by issuing a Creditor's Statutory Demand on your behalf.

What can I do if I have not been paid?

Sometimes companies put their heads in the sand when it comes to paying their debts. There are many reasons for this – financial trouble, mismanagement, sheer bloody-mindedness, to name a few.

If you have provided a service to a company in good faith, the debt is undisputed and yet you still cannot seem to be paid, this can affect your business, cash flow and peace of mind.

In such cases, creditors have recourse to the law through a Creditor’s Statutory Demand (CSD). This is a legal option to motivate debtors to do the right thing and pay what they owe. For greater certainty on CSD proceedings, it is always best for creditors to engage a solicitor.

Ballantyne Law Group is a leading Gold Coast law firm well-versed in the issuing of CSDs for our clients. If you believe your situation meets the criteria for a CSD, please contact our Gold Coast Commercial Law team.

How effective is a CSD?

CSDs sit within the Corporations Act and are a compelling and legal notice of intent, one that debtors are unwise to ignore.

Since 1 July 2021, a CSD must be for a minimum of $4000 owed. If the same company owes you more than one debt, all can be included in the one CSD. Once the demand is issued, a company has 21 days to act. Should payment remain unforthcoming, there follows a presumption of insolvency.

A company is considered insolvent if it cannot pay its debts when they fall due. Insolvency also enables the courts to make an order to appoint a liquidator and wind up the company. That is a serious situation, compounded by the fact that in CSD cases, the courts are well known for being sticklers for compliance and reticent about granting extensions.

Along with providing strong motivation to pay debts, a CSD carries other benefits. These include circumventing the challenges of burden of proof of insolvency and resolving faster than is the case with traditional debt recovery. Generally, one of the following three solutions applies:

  • the debt is paid
  • a payment arrangement is made
  • an application is made to have the CSD set aside

Why should I engage a lawyer for a CSD?

Here on the Gold Coast, Ballantyne Law Group’s Commercial Law is experienced in the issuing of CSDs. We understand our clients’ right to be paid and desire to be paid, and we understand the intricacies and pitfalls of the law in these matters.

We ensure all information and documentation is correct, thereby mitigating the risk of the CSD being rendered invalid, and we act within a proper legal framework that takes the burden off you.

In conclusion, Creditor’s Statutory Demands are important documents and should never be ignored. And while as a creditor you may have right on your side, it makes good sense to have a lawyer on your side as well.

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