Company Debt Recovery Explained

In recent times the topic of company liquidation relating to business debt recovery has become more apparent in the media as a consequence of both difficult economic times and the lack of proper systems and structures within companies.

The issuing of a Statutory Demand and ultimately the filing of an application to wind up a company (with company debt recovery in mind) with the Supreme Court of your state or territory must be undertaken only after you have received proper legal advice due to the criteria needed to be met by the Corporations Act and the substantive common law principles which exist in this area.

Often Statutory Demands are used as debt recovery tools which is not their intention. Statutory Demands are designed to be used only for the winding up of companies that are insolvent – i.e. those companies that are unable to pay their debts when they fall due and owing.

The Statutory Demand requires consideration of the nature of the debt, the standing by the creditor to issue such a document along with compliance of the contents of the document and service of same.

Failure to comply with these strict requirements may expose people to the risk of the company to which the Statutory Demand is being issued making an application to the Supreme Court to set aside the Statutory Demand which, if successful, may expose people to significant adverse costs orders.

Following the expiration of the 28 day period allowed for a company to respond to a Statutory Demand, the application to wind up, service and advertising also require strict adherence to a number of statutory time limits and steps which must be undertaken in order to bring about a successful winding up application.

Despite these factors, with the proper legal advice, in instances where debts from insolvent companies remain outstanding, these orders are able to be obtained following proper consideration of your individual circumstances and the relevant law.

The staff of Hall & Co Solicitors have previous advised a variety of clients ranging from large corporate entities in the transport industry through to small sole trader businesses, offering practical and affordable advice to recover outstanding money and deal with difficult debtors.

Show Comments

Comments are closed.