Ignored the statutory demand? The winding-up clock has started

The file has changed now

If the company did nothing within the 21 days after service of the statutory demand, you may have grounds to seek a winding up order. The Federal Court says a creditor may rely on the presumption of insolvency within three months of the date of non-compliance. That turns a stalled debt into a formal insolvency decision.

But the ignored demand only helps if the demand was valid in the first place. The debt must have been due and payable, service must have been proper, and there must not have been a genuine dispute that would undermine the demand later. If the paper trail is weak, the next step becomes harder and more expensive.

Diarise the three-month window today

The first practical job is simple. Record the three-month deadline immediately and treat it as a hard date. The Federal Court guidance is clear that the creditor who served the demand may rely on the presumption of insolvency only within three months of non-compliance. Miss that window and you may lose the procedural advantage.

Do not leave the file sitting there while someone waits for a reply that is unlikely to come. Put the expiry date in your diary, note who owns the file, and set the next task now. If you later need to explain why you delayed, a vague plan will not help you.

Source: Official guidance

Check for other creditor action first

Before you spend more, check whether another creditor has already started recovery action or whether the company is already in external administration. The Federal Court’s corporations resources and checklist point users to winding-up guidance and the need to check the company’s status before filing. That quick search can save wasted cost.

If the company is already in liquidation or administration, the path changes. Your own application may still matter, but the commercial value can be very different from what you expected. A fast records check helps you avoid duplicating steps that have already been taken and lets you decide whether there is still a useful recovery outcome.

Weigh the cost against likely recovery

A winding up application is not just a legal move. It is a recovery investment, and the question is whether the likely return justifies the extra filing and preparation costs. A strong presumption of insolvency does not guarantee money back if the company has little left, other claims sit ahead of you, or the debt is too small.

Review the debt amount, the company’s apparent trading position, your proof of service, and any history of broken promises or partial payments. If the numbers suggest a thin return, stopping may be the smarter business call. If the amount is meaningful and the company still appears to have value, filing may still be commercially sensible.

Prepare the application and move decisively

If the timing still works and the recovery case still stacks up, prepare the winding up application now. The Federal Court’s forms page lists the forms for a statutory demand affidavit and the notice of application for winding up, and the checklist confirms the process is document heavy. Clean dates and correct forms matter.

Your next step is straightforward. Diarise the three-month window, check for other creditor action, compare the likely recovery against your costs, and get the application file ready. If you want help deciding whether to proceed, call CRP today about debt recovery. CRP coordinates independent qualified professionals who can review your position and help you choose the next practical step.