Published: 13 March, 2018 11:43

If your debtor is a limited liability company, then provided certain requirements are met, the Statutory Demand procedure can be used as a means of debt collection.

Abuse of this procedure is not tolerated by the courts. Getting it wrong can be an expensive mistake.

The most important requirement is that the Statutory Demand procedure is only available if there is no dispute that the money is owed. If there is a dispute you cannot issue a Statutory Demand.

At CollectIT we are often told by our clients that the reasons given by the debtor for disputing the debt are not genuine. That may be so but unless our clients have solid proof they can rely on in court, using the Statutory Demand procedure is very risky because a court may not be able to determine who is telling the truth based on the court documents.

If there is no dispute then CollectIT issue a Statutory Demand on its clients’ behalf and serve it on the debtor. The amount of the demand is the debt owed, together with any interest and collection costs that can be contractually claimed.

If the Statutory Demand is served and no steps are taken by the debtor company to set it aside, then within 15 working days from the day after service the creditor is able to file for liquidation of the debtor company in the High Court.

If there is a dispute, and a Statutory Demand is issued, this is how the exercise can go ...

After being served with the Statutory Demand the debtor company has 10 working days to apply to the High Court to set the Statutory Demand aside. If the documents are filed within this time limit (no extensions are given) then the creditor would need to have court papers prepared and filed explaining why it should not be set aside. The Court hearing is on the papers, which means there is no questioning of witnesses.

The creditor company must be represented by a lawyer in the High Court.

Following the hearing the successful party is able to claim costs.

If it is determined that the Statutory Demand procedure should not have been used because a genuine dispute existed, costs in the vicinity of $6,000 are likely to be awarded to the debtor company - an expensive mistake!

Do not make the costly mistake that so many others have made using this procedure incorrectly.

Contact CollectIT today on 07 834 9111 and discuss your individual situation, or LODGE YOUR DEBT.

Actions: E-mail | Permalink |

Bright Line Test - Will This Impact You?
Do you know your legal obligations if you are in the business of repossessing goods?
Are debtors causing you anxiety? Could you use a Statutory Demand to encourage payment?
Legislation Introduced to Modernise Courts and Tribunals
Privacy Commission Critical of Debt Collector
Need Cash for Christmas?
7 Ways to Improve Your Chances of Getting Paid
Talk About Your Debts Owed - It's Important!
Are you embarrassed to chase debtors for outstanding money?
When can I pass an overdue account to debt collection?
District Court Becomes One
If your debtor passes away, who will pay you?
Can I recover money from debtors living in Australia?
Are your debtors going to pay before year end?
How can CollectIT assist with your financial goals in 2017?
Do you want to be paid before Christmas?
Statutory Demands - Recent Court Cases
Statutory Demands - can be an expensive exercise if used incorrectly
Privacy – Can you use information about your clients?
NZ Business Numbers Act Comes Into Force
3 Reasons Why Managing Your Debt and Anxiety is Critical For You and Your Business
End of Financial Year Clean Up
Do You Take the Debt to Court or Write it Off?
Debt, Stress and Your Health
Are Slow Payers Undermining Your Business?
Bad Credit Ratings
Rush Jobs
Beware of Caveats
All Companies in New Zealand have the word "limited" after their name. What does the word "limited" mean?
Small businesses declared to be the fastest bill payers
Can you seize assets in New Zealand if your debtor lives overseas?
Serving Court Documents Overseas
The world hates change, yet it is the only thing that has brought progress – Charles Kettering.
Money isn't everything . . . but it ranks right up there with oxygen - Rita Davenport)
While most are dreaming of success, winners wake up and work hard to achieve it - Unknown
Are you in the Business of Repossession?
Courts are making changes to civil debt enforcement
A Landmark Case in NZ - Foreign Spammer Slammed by Judge
Why does CollectIT have an industry leading success rate?
When can I pass an overdue account to debt collection?
I will make payment online tonight
Can you breathe a sigh of relief once you have been paid?
Are you aware you can report spam texts?
Are you worried about losing business if you send your debtors to debt collection?



Sign up now to receive our complimentary '7 ways to improve your chances of getting paid' guide.

We send a regular email newsletter full of useful information and advice on debtor management and debt collection.

We would love to include you on the list, we won’t share your info and you can unsubscribe at any time.

Yes Please!


Not a Client?

Register Here

Already a Client?

Lodge A Debt