News & Insights

The Federal Government has recently announced that from 1 July 2021 the statutory minimum amount to serve a creditor’s statutory demand will increase from $2,000 to $4,000. The 21 day period within which a debtor must respond to a statutory demand and the personal liability on Directors for insolvent trading will remain the same.

The changes to section 5.4.01AAA(1)(b) of the Corporations Regulations 2001 (Cth) aim to account for the impact of inflation and follow the expiry of the insolvency moratorium on 1 January 2021.

For those few companies still eligible for temporary restructuring relief who have been granted the maximum extension, the threshold amount of $20,000 may remain unchanged into the month of July. However, from 1 August 2021 the new statutory minimum of $4,000 will apply to all companies.

Serving a statutory demand continues to be an important tool in seeking repayment from your debtors as they can be served without a court judgment when an affidavit in support is included confirming there is no dispute as to the amount owed. Our team is well placed to help with service of statutory demands to ensure you act within the latest regulations.

If you would like assistance chasing an unpaid debt or have any questions about the above, please email or call us.

The information contained in this article is general in nature and cannot be relied on as legal advice nor does it create an engagement. Please contact one of our lawyers listed above for advice about your specific situation.