If you are seeking to recover a debt, it is important that the method of debt recovery does not result in legal fees and associated costs which exceed the debt owed.
Sometimes, a well-drafted letter of demand may be all that is needed to encourage a debtor to pay the debt in full, or at least, make acceptable arrangements to repay the amount in instalments. When negotiating with debtors, it is important to keep written records of discussions which can be referred to later should the agreed arrangements not be honoured.
A statutory demand may be the best means of recovering a debt owed by a company that exceeds $2,000. In such cases, a complying statutory demand is served upon the debtor company giving it 21 days to repay the debt. If the money is not repaid within this period, or the company fails to have the statutory demand set aside, the debtor will be presumed insolvent and winding up proceedings may be instituted against them.
The drafting and service of a statutory demand must comply with strict requirements and formalities so it is important to obtain legal advice should you wish to pursue this course.