Insolvency
Pressure on companies that won't pay, and defence for creditors when a liquidator comes after you.
- Statutory demands
- Winding-up applications
- Unfair preference claims
- Insolvent trading and director claims
Don't chase them.
Sue them.
Reminders get ignored. Court proceedings can't be. KBH LAW prepares your claim and puts it in the hands of independent lawyers who act for creditors in insolvency, bankruptcy, litigation and debt recovery.
Where these matters are heard
- Federal Court of Australia
- Federal Circuit and Family Court of Australia
- Supreme Courts of the states and territories
- District, County and Local Courts
Our position
Stop being polite to people who owe you money. Sue them.
Every friendly reminder buys the debtor more time. Time to move assets, fold the company, or let the limitation period run out.
We work only for the party that is owed. No months of emails. No payment plans that never get paid. One demand, one deadline, then court.
01One demand.
Not five. A formal letter with a date and a consequence.
02A real deadline.
When it passes, your lawyer acts on it. The debtor learns that quickly.
03Then court.
Proceedings, a statutory demand or a bankruptcy notice. Whichever the law allows.
Expertise.
Each one exists to do the same thing: go after what you are owed, or give you a decision you can make with your eyes open.
Bankruptcy
When the debtor is a person, the law gives you a different set of tools. They are used in order.
- Bankruptcy notices
- Creditor's petitions
- Trustee recoveries
- Setting-aside disputes
Litigation
When the debt is disputed, or the money is bigger than an invoice, it goes to court and is run hard.
- Commercial and contract claims
- Guarantee enforcement
- Freezing and search orders
- Appeals
Debt recovery
One invoice or a whole ledger. Demand, judgment, enforcement. Followed through until it ends.
- Letters of demand
- Court claims and judgments
- Garnishee and property orders
- Ledger and portfolio recovery
Recovery pathway.
Tell us three things about the debt. See the legal route in order, and where the pressure lands. General information, not advice on your matter.
Recovery pathway
Who owes you?
The debtor is
Amount owed (AUD)
How old is the debt?
Months overdue5 months
Thresholds and timeframes shown are Australian federal law and general rules of thumb. Your facts change the route.
Discuss your matter →
Send us the invoice and the debtor's name. We put it in front of a lawyer who tells you the first step.
The statutory demand. Twenty-one days to pay.
One of the most powerful tools against a company that owes you. Here is how the clock runs once it is served.
0
Day 0Demand served
On the company's registered office. The debt must be due, undisputed and at least $4,000.
21
Day 21Deadline to pay
The company pays, secures the debt, or files an application and affidavit to set the demand aside. Inside 21 days only.
22
Day 22Presumed insolvent
Ignore the demand and the law presumes the company cannot pay its debts.
3m
3 monthsWind them up
Apply within 3 months of the missed deadline to keep the presumption. The court can put a liquidator in charge.
Corporations Act 2001 (Cth), Part 5.4. Timing assumes valid service and no application to set the demand aside.
Recovery tools compared.
Every recovery tool has a threshold, a clock and a consequence. This is what each one does.
| Tool | Against | Minimum debt | Time to respond | If they ignore it |
|---|---|---|---|---|
| Letter of demand | Anyone | None | Usually 7 to 14 days | Proceedings are issued, or a statutory demand is served. |
| Statutory demand | Companies | $4,000 | 21 days | Presumed insolvent. Winding-up application. |
| Court claim | Anyone | None | Set by the court's rules | Default judgment, then enforcement. |
| Bankruptcy notice | Individuals with a judgment debt | $10,000 | 21 days | Act of bankruptcy. Creditor's petition. |
| Enforcement orders | Judgment debtors | None | On the order | Wages, bank accounts and property taken to pay you. |
Thresholds under the Corporations Act 2001 (Cth) and the Bankruptcy Act 1966 (Cth). Court procedure varies by state and court.
03 / Litigation
When they fight, take them to court.
Some debtors dispute everything. Some hide behind guarantees, trusts and new companies. When the debt won't move on a demand, your lawyer issues proceedings and presses every step.
If the claim looks weak, you're told before you spend money on it. Then you decide.
- Contract and invoice disputes
- Personal guarantees
- Freezing orders
- Phoenix company claims
- Director and officer claims
- Enforcing judgments
Cross-border
Moved the money offshore? Your claim can follow.
Debtors cross borders. So do judgments and insolvencies. Your lawyer can use the law that lets a claim made here reach assets held elsewhere.
Foreign judgments
Registering and enforcing judgments between Australia and the countries covered by the Foreign Judgments Act 1991 (Cth), New Zealand judgments are enforced under the Trans-Tasman Proceedings Act 2010 (Cth).
Cross-border insolvency
Recognition of foreign insolvency proceedings under the UNCITRAL Model Law, given effect in Australia by the Cross-Border Insolvency Act 2008 (Cth).
Tracing and freezing
Finding where the assets went and asking the court to freeze them before they move again.
We work for the party that is owed.
Creditors, lenders and the people appointed to recover money for them.
Trade creditors
Suppliers, builders and service firms with invoices that should have been paid months ago.
Lenders and financiers
Loan defaults, guarantees and securities that need enforcing.
Liquidators and trustees
Recoveries for insolvency practitioners: preferences, director claims, asset realisation.
Landlords
Rent arrears, guarantees and tenants who leave owing money.
Shareholders and partners
Money taken out of a business that should have stayed in it.
Businesses with a ledger
Many small debts, one process. Volume recovery on a fixed workflow.
How a matter runs.
Clarity first. Then pressure, in the right order.
01
The facts
Invoice, contract, debtor. We gather what is owed, who is liable and what they own.
02
The route
Your lawyer advises the fastest lawful tool, what it costs and what could go wrong. In writing.
03
The pressure
Demand, notice or proceedings. Served properly, so it can't be knocked out on a technicality.
04
The end
Payment, a settlement you accept, a judgment enforced, or a liquidator appointed.
How it works
Independent lawyers act for you.
KBH LAW is not a law firm. We prepare your claim and hand it to an independent lawyer, who advises you, acts for you and signs everything that goes out.
- 01You tell us who owes youInvoices, contract and the debtor's details.
- 02We prepare the fileSearches, documents and a draft for the lawyer.
- 03A lawyer takes it onThey advise you and agree their terms with you directly.
- 04The lawyer actsDemand, statutory demand or proceedings, signed and sent by them.
Questions
Straight answers.
How long do I have to recover a debt?
For most contract debts, six years from when the debt fell due in most Australian states (three years in the Northern Territory). After that, the debtor can say the claim is out of time. Part-payment or a written acknowledgment can restart the clock. Don't wait to find out where you stand.
Can I send a statutory demand if they dispute the debt?
Not if the dispute is genuine. The company can apply to set the demand aside and you may pay its costs. If the debt is disputed, the right route is usually a court claim first. Your lawyer tells you which applies before anything is served.
What if the company is already insolvent?
Then the question is what you can still recover and in what order. Secured creditors, guarantees and director claims all matter. Your lawyer looks at all of them.
A liquidator says I must repay money I was paid. What now?
That is usually an unfair preference claim. There are defences, and time limits on the liquidator. Don't pay and don't ignore it. Get advice on the letter first.
What does it cost?
It depends on the tool and whether the debtor fights. You get the cost of the next step in writing before you commit to it.
Insights.
Notes for creditors on the recovery tools used most. General information, not advice on your matter.
The 21-day clock: how a statutory demand works
Who it can be served on, the $4,000 minimum, and what happens when the company misses the deadline.
Bankruptcy notices: the judgment you need first
The $10,000 threshold, the six-year limit on judgments, and the 21 days to pay.
A liquidator wants your money back. What now?
Unfair preference claims, the defences, and why you should neither pay nor ignore the letter.
Enforcing an Australian debt against an offshore debtor
Foreign judgments, New Zealand, and recognition of foreign insolvency proceedings.
Make an enquiry
Tell us who owes you.
Send the basics. We come back with the next step and the independent lawyer who will act for you.
- Phone
- (03) 8375 4177
- debt@kbhlaw.com.au
- Melbourne
- Level 7, 55 Collins Street, Melbourne VIC 3000
- Sydney
- 377 New South Head Road, Double Bay NSW 2028
- Brisbane
- Level 11, 458 Brunswick Street, Fortitude Valley QLD 4006
- Perth
- By appointment