If you are in business and offer trading terms, this bad boy is lethal and must be in your arsenal of debt collection tools.
What is it: A legal demand letter which gives your customer 21 days to pay.
Requirements: -Your customer must be a Pty Ltd company.
-Your customer must owe you more than $2000.
-The debt must not be in dispute.
What does it do: -Gives the customer 21 days to pay you the full amount, or they are deemed to
be insolvent.
What they need to do: -Pay you the entire amount or
-Apply to set it aside.
Why it works: -It will be sent from a lawyer.
-It compels the debtor company to pay.
-It can often cost the debtor company more to set it aside than they
actually owe you, so many simply just pay the debt.
-It is legislated by the Corporations Act.
After the 21 days: -You can apply to the Supreme Court to liquidate them and have a further 2
months to do so.
Why we love them: -They are awesome. When used correctly, they are infinitely more effective
than ordinary legal action, credit defaults or any of that other stuff.
How much do they cost: Expect to pay around $400.
Want to know more? Most commercial lawyers do them, just shop around for price. Often though, you don’t even need to actually issue a Stat Demand- just the mere mention of it can and does scare even the most evasive of debtors. In your final reminder, final notice or Letter of Demand, just mention that a Statutory Demand may be served on their Registered Office and this may be all you need to get paid.
Cheers guys. Please feel free to share. So many people have no idea such a thing exists. So long as your debt is more than $2000, your customer is a company and there is no dispute, you’re in business! Literally!
Cheers