If you have received a Creditors Statutory Demand For Payment you have 21 days to pay the debt.
If you ignore a Creditors Statutory Demand For Payment your company may be placed into liquidation.
If you apply to the Supreme Court to have the Creditors Statutory Demand For Payment set aside and lose you must pay the debt, the claimants legal costs and court fees within 7 days or your company may be placed into liquidation.
If the creditor is determined to press his claim your costs to have the Creditors Statutory Demand For Payment set aside will mount very quickly;
- cost to prepare application: $3k – $5k
- court filing fee:$2k
- preliminary appearances by your counsel and cost of instructing solicitors: $5k – $7k
- preparation, settling, filing affidavits: $5k – $15k
- subpoenas: $5k – $10k
- Court hearing fee: $5k
And you aren’t even in court to have your application to set aside heard yet…..
- appearances by your counsel and cost of instructing solicitors at the hearing: $10k – $15k
- if you lose you will have to pay the creditors legal costs: $20k – $40k on top of the debt, the court fees and your own legal expenses
If you win you may then have to sue the creditor to recover your costs, at which time he may then counter sue you – the outcome; a costly, protracted legal battle.
The only winners then are the lawyers, the barristers, the senior / queens counsel etc etc….
In these situations it is rare that there is not a debt that is genuinely owed, as a debtor, whether you like it or not, you have to carefully consider the commercial wisdom of attempting to settle the matter within the 21 days before you start shelling out tens of thousands of dollars on legal expenses or even commencing proceedings that may not turn out how you expect.
On each side there will be a set of legal teams telling each party there are no guarantees but that they have a chance….. whilst they have their hand in your pocket for some serious cash……. but it is you who have to live with the cost and the risk.