Statutory demands and the 21-day clock

Most debt collection is a series of reminders, calls and letters. A statutory demand is different. It is a formal step under the law that applies to companies, and it starts a clock that does not stop. Understanding what it means, and acting immediately, protects the company and its directors.

What a statutory demand is

A statutory demand is a written demand served on a company for payment of a debt that is due and payable, above a minimum amount set by law. It must follow a prescribed form. Once served, the company generally has 21 days to respond.

The three options

Option	What it involves
Pay	Pay the debt in full within the time allowed
Settle	Reach an agreement with the creditor, such as a payment arrangement, in writing
Apply to set aside	Apply to court within the time allowed, if there is a genuine dispute or other grounds

Doing nothing is not an option. If the company does not comply within the time allowed, it can be presumed insolvent, and the creditor may apply to the court to wind it up.

Short on time? You can enquire in about a minute and come back to this page while we check what is possible.

Hour by hour, roughly

Stage	Typical timing	What speeds it up
Enquiry	About 60 seconds	Accurate figures for amount and revenue
First call	Minutes, in business hours	Answering an unknown number
Approval	As fast as 15 minutes, commonly within the hour	Statements via a secure bank link
Signing	Same day	Directors and guarantors on standby
Funds	Within 24 hours possible	Payee details ready, including the ATO or supplier

Why legal advice comes first

The rules around statutory demands are technical, and the time limits for applying to set one aside are strict. A lawyer can tell you whether the demand is valid, whether there are grounds to challenge it and what the best course is. Get that advice in the first days, not the last.

When paying is the answer

If the debt is genuine and paying is the right course, money is often the only obstacle. Fast funding removes it:

• Smaller debts: unsecured funding on bank statements, approval within the hour common.
• Larger debts: property-secured funding with no valuation, interest prepaid or added.
• Several creditors: consolidation, so one demand does not simply shift pressure elsewhere.

Payment can be made directly to the creditor or its lawyer, with confirmation kept for your records.

Look at the whole picture

A statutory demand is often a symptom of broader pressure: ATO debt, supplier arrears or short-term loans stacking up. Paying one creditor while others follow can just move the problem. Directors should consider the company’s overall position and their duties, including the duty not to trade while insolvent. ASIC publishes guidance for directors.

A worked example (illustrative)

An electrical contracting company receives a statutory demand from a supplier for about $64,000. The director’s lawyer confirms the debt is genuine and that paying is the best option. On day three, the director enquires and offers her home as security, is approved within the hour and the supplier’s lawyer is paid on day five, well inside the time allowed. The director then works with her accountant on the company’s cash flow.

Keep a record

Keep copies of the demand, your lawyer’s advice, the payment confirmation and any settlement agreement. If the matter is ever revisited, a clear paper trail protects the company.

Count the days carefully

The 21 days run from service, and how a demand was served can affect when service is taken to have occurred. Do not guess. Write down the date you received it, how it arrived and the date your lawyer says the deadline falls, and diarise reminders well before it. Funding approved on day 19 is cutting it fine; funding arranged in the first week leaves room for anything unexpected.

Prevention

The best protection is acting on overdue debts long before they reach this stage: talking to creditors, agreeing arrangements in writing and arranging funding early. A statutory demand is usually the last step in a long process, and every earlier step is a chance to resolve the debt more cheaply.

Documents that speed things up

The fastest approvals happen when this list is ready to send in one reply:

• The statutory demand and the date it was served
• Your lawyer’s advice
• Creditor or lawyer payment details
• Property details or bank statements
• Company and director details

Common delays and how to avoid them

These are the things that most often turn a same-day answer into a three-day one:

• Waiting to see if the creditor follows through
• Not getting legal advice on a disputed debt
• Other creditors not disclosed
• Directors unavailable to sign

Where to go from here

• Received a statutory demand?: A company that receives a statutory demand has 21 days to act. What it means, why speed matters, getting advice and how fast funding can help pay or settle.
• 24-hour caveat loans: Business caveat loans funded fast: $20k to $5m against residential or commercial property, no valuation needed, interest prepaid or added to the loan.
• Fast business debt consolidation: Fast business debt consolidation rolls expensive short-term loans, ATO debt and supplier arrears into one facility. Often property-secured, no valuation.
• Refinance before a default hits: Behind on a business loan and a default notice is close? How to refinance fast, what lenders need and why acting before the default is listed saves so much.
• Fast business loans with defaults or judgments: Business loans with defaults or court judgments on file: how they are assessed, why paid ones matter less and how property can make approval fast.

Terms used in this guide

• Prepaid interest: interest paid up front for a period, so there are no repayments during that period.
• Capitalised interest: interest added to the loan balance instead of being paid as you go.
• Guarantor: a person who agrees to repay the loan if the borrower cannot.
• Statutory demand: a formal demand for payment of a company debt. If not dealt with in time, the creditor can apply to wind the company up.
• Settlement: the moment a loan is funded and any security registered, or a property changes hands.

Before you accept an offer

• What are the conditions on this approval, and which are still outstanding?
• What is the repayment schedule in dollars, not percentages?
• Can I pay it out early without a penalty?
• Who do I call if something changes during the term?
• Is there anything in the documents you would point out to me?

Get the form right, get funded faster

The enquiry takes about 60 seconds, and those 60 seconds decide how smoothly everything after it goes. Accurate figures for revenue and the amount, a straight answer about credit history and a clear yes or no on property mean the assessor can move straight to the decision. Guesswork means rework, and rework is the enemy of a 24-hour turnaround.

In a nutshell

• A statutory demand starts a strict clock
• Companies generally have 21 days to act
• Pay, settle or apply to set it aside
• Get legal advice straight away

Why this can move in hours, not weeks

Fast does not mean careless. Every loan still gets a proper look at how the business trades, who owns it and how the money will be repaid. The difference is that we do the looking quickly and in parallel. Bank statements can be read in minutes once they are shared, property loans do not wait on a valuation, and documents are signed electronically. Approval within the hour is common, and funding within 24 hours is possible when every party signs promptly.

Find out how fast you could be funded

The quickest way to find out is to ask. It is a 60-second form with no credit check attached, your details stay with us, and someone real gets back to you. Please take care with the amount, revenue and property questions, because accurate answers are what make fast funding possible. Check your options.