2001
Hendersons Legal established in Melbourne
Creditors, directors and liquidators
the clients we act for in debt and insolvency matters
21 days
for a company to deal with a statutory demand
What is happening with the debt?
Pick the situation closest to yours and we’ll show the topics that usually come up.
I’m owed money
Letters of demand and debt recovery
Getting an unpaid account paid, starting with a letter of demand.
Issuing a statutory demand
A formal demand on a company for a debt of $4,000 or more, and how it can lead to a winding up application.
Court proceedings and enforcement
Suing for the debt, then collecting on the judgment.
If a debt is not paid, you can sue for it. The Magistrates’ Court of Victoria hears civil disputes up to $100,000. Larger claims go to a higher court.
Once you have a judgment, you can ask the Magistrates’ Court for an oral examination of the debtor, a warrant to seize property, an attachment of a debt, an attachment of earnings order or an instalment order. Which step suits depends on what the debtor owns and earns.
If you already have a judgment you can’t collect, tell us what you know about the debtor’s assets and income. Our court representation and litigation page covers the courts we appear in.
Sources: Magistrates’ Court of Victoria: starting a civil matter, Magistrates’ Court of Victoria: enforcement
This is general information, not legal advice. Every situation is different, so get in touch about yours.
Personal guarantees and bankruptcy of a guarantor
Claiming against a director or other guarantor, and what bankruptcy involves.
If someone gave a personal guarantee for the debt, you may be able to claim against them as well as the company. If the company is in voluntary administration, you generally need the court’s consent before acting on the guarantee.
To make an individual bankrupt, a creditor generally needs a final court judgment or order for $10,000 or more, then a bankruptcy notice, then a creditor’s petition. Bankruptcy is not available against a company.
Send us the guarantee with the credit application or contract it was signed with.
Sources: AFSA: make someone bankrupt, ASIC: Voluntary administration, a guide for creditors, ASIC: Personal bankruptcy and liquidation of a company
This is general information, not legal advice. Every situation is different, so get in touch about yours.
My company is being chased
Winding up application against your company
A creditor asks the court to wind up your company, often after an unanswered statutory demand.
Directors’ personal exposure
Insolvent trading, director penalties and personal guarantees.
A customer or company has collapsed
Liquidator demanding money back
A liquidator says a payment you received before the collapse was an unfair preference.
Proof of debt, retention of title and the PPSR
Claiming in a liquidation, and protecting goods you supplied on credit.
When a company goes into liquidation, an unpaid creditor generally needs to lodge a proof of debt to vote or receive a dividend. This is usually a formal form with invoices or other evidence attached. A claim can be rejected if the evidence falls short. The liquidator must give at least 14 days’ notice of the deadline.
Once a liquidator is appointed, unsecured creditors generally cannot start or continue legal action against the company unless the court permits. If you supplied goods under a retention of title clause, registering on the Personal Property Securities Register (PPSR) gives you a better chance of getting them or your money back. A supplier that has not registered is treated as an unsecured creditor.
If a customer has gone into liquidation owing you money, send us your invoices and terms of trade and we’ll check where you stand.
Sources: ASIC: Liquidation, a guide for creditors, PPSR: retention of title arrangements
This is general information, not legal advice. Every situation is different, so get in touch about yours.
Personal debts and bankruptcy
Bankruptcy and its alternatives
Bankruptcy, debt agreements and personal insolvency agreements.
Bankruptcy is for individuals. Companies go into liquidation instead. The Bankruptcy Act 1966 (Cth) also provides two formal alternatives: a debt agreement (Part IX) and a personal insolvency agreement (Part X). Each is a legally binding agreement between a person and their creditors.
They work differently. A debt agreement has limits on income, assets and debt, and goes through a registered debt agreement administrator. A personal insolvency agreement has no such limits and involves a trustee. A bankrupt person can no longer act as a company director.
We explain each option, negotiate with creditors and banks, and act for creditors in bankruptcy proceedings.
Sources: AFSA: compare your insolvency options, AFSA: debt agreements, AFSA: personal insolvency agreements, ASIC: Personal bankruptcy and liquidation of a company
This is general information, not legal advice. Every situation is different, so get in touch about yours.
Recovering a debt from an individual
Claims against a person rather than a company.
Recovering from an individual follows the same path as most debts: a letter of demand, a claim, then judgment and enforcement. The statutory demand process in the Corporations Act is for companies, so it does not apply to a person.
If a judgment goes unpaid, we can look at the enforcement options and, in some cases, bankruptcy. Before you spend more on a debtor, we help you work out what they have and whether the next step is likely to be worth the cost.
Sources: Magistrates’ Court of Victoria: enforcement, Federal Court Corporations Information Sheet 1
This is general information, not legal advice. Every situation is different, so get in touch about yours.
Received a statutory demand or a liquidator’s letter?
Call (03) 9629 2211 today. A company has 21 days from service of a statutory demand to comply or to file and serve an application to set it aside, and that deadline cannot be extended. Sending an enquiry does not stop the clock. If a liquidator has written to you, check the date in the letter and do not ignore it. Then send us the details so we can see the paperwork.
Send us the details
The form opens a file with our debt recovery and insolvency lawyers. Describe the matter briefly and upload the demand, invoice or letter as you go. Leave blank anything you’re not sure about. If a deadline is running, call (03) 9629 2211 as well.
Have these handy:
- The demand, invoice or letter, ready to upload
- The names of the companies or people involved, so we can run a conflict check first
- Any date or deadline in the paperwork, and the day it arrived
Why clients choose our debt recovery and insolvency lawyers
A short walk from the Supreme Court
Our principal, David Henderson, has 30+ years’ experience. Our office is a few minutes from the Supreme Court of Victoria, so we can attend winding up hearings in person without fuss, and we appear in the winding up list ourselves. In many matters that saves the cost of briefing counsel.
We know how the other side thinks
Because we act for creditors, directors and liquidators, we know how each is likely to approach a debt dispute. We check for conflicts before we discuss the details of a matter.
Fees confirmed upfront
We confirm the scope and our fees in writing before we start.
Urgent matters come first
We work by phone, email and e-signing, and put urgent matters first.
How it works
Send us the details
Use the form on this page or call us, and tell us what is happening with the debt. Include any date or deadline.
We clarify your instructions
We confirm what you need and briefly review the demand, invoice or other documents.
You receive a costs agreement
We prepare a costs agreement and disclosure statement setting out the scope and our fees.
We start work
Once you accept, we get going and keep you updated.
Related practice areas
Court representation and litigation
Representation and dispute resolution when a debt or insolvency dispute goes to court.
Contracts, structures and disputes for business owners.
Trading terms, supply agreements and other contracts for small and growing businesses.
Payment claims and disputes for owners, builders and contractors.
Loan and security documents, guarantees and mortgage recovery.
Frequently asked questions
What is a creditor’s statutory demand?
A creditor’s statutory demand is a formal written demand served on a company for a debt of at least $4,000 (for demands served from 1 July 2021). To comply, the company must pay the amount, or secure or compound for it to the creditor’s reasonable satisfaction, within 21 days after service. The other option is to apply to the court to set the demand aside. If it does neither, the company is presumed to be insolvent, and the creditor can rely on that presumption if it applies to wind the company up within three months of the non-compliance. Our guide explains how a statutory demand can help you recover a company debt.
How long do I have to recover a debt in Victoria?
An action on a simple contract generally has to be brought within six years of the date the right to sue arose. An action on a judgment has a longer period, 15 years. Other time limits apply to other kinds of claim, and the date the clock starts is not always obvious, so get advice early rather than assuming you have time.
What is the difference between liquidation and bankruptcy?
Liquidation is for companies and bankruptcy is for individuals. In a liquidation, a liquidator takes control of the company’s affairs and winds them up for the benefit of creditors. In bankruptcy, a trustee takes over the person’s bankrupt estate. The two can overlap: a person who becomes bankrupt can no longer act as a company director.
Can company directors be personally liable for debts?
Usually not, because a company’s trading debts are its own. The main exceptions are insolvent trading (debts the company took on while insolvent), director penalties for unpaid PAYG withholding, GST and super guarantee charge, and personal guarantees. A director penalty notice gives 21 days to act, and liquidating the company does not cancel a personal guarantee. A safe harbour can protect a director who is developing a course of action reasonably likely to lead to a better outcome for the company, but it has conditions, including around paying employee entitlements and meeting tax reporting obligations.
What can I do if my company receives a statutory demand?
Note the date it was served, because the 21 days run from then. Decide quickly whether the debt is genuinely owed. If it is, the company can comply with the demand. If the company disputes the debt, has an offsetting claim or the demand is defective, it can apply to the court to set the demand aside. That application must be filed, with a supporting affidavit, and served within the 21 days, and the court cannot extend that time. A timely application also extends the time to comply with the demand until seven days after the application is decided. In the Supreme Court of Victoria, applications filed from 21 July 2025 are timetabled by the court, which aims to hold the final hearing within six weeks where possible. Get legal advice straight away. Our guide explains what to do if your company receives a creditor’s statutory demand.
Do I have to repay a liquidator’s unfair preference demand?
Not automatically. A claim only succeeds if the payment meets the test for an unfair preference: the company was insolvent when it paid, or became insolvent because of the payment, and you received more than you would have by claiming in the winding up. The payment also has to fall within the relevant period, usually the six months before the liquidation is taken to have begun. Defences can apply, including good faith with no reasonable grounds to suspect insolvency. Ask the liquidator for the payment details and evidence, and get advice before you repay or ignore the demand. Read more about unfair preference claims in Victoria.
This is general information, not legal advice. Every situation is different, so get in touch about yours.
Tell us what is happening with the debt
Send us the details or call (03) 9629 2211, and our Melbourne debt recovery and insolvency lawyers will come back to you about next steps.