The use of a statutory demands is often misunderstood. They can be a quick and effective tool to obtain payment of a liquidated debt, with the threat of bankruptcy or insovency proceedings as the driver that leads to a high rate of success. However, they are not a universal panacea.
Generally, they cannot be used against individuals for unliquidated debts, nor can they be used if the debt is subject to a genuine dispute. The debtor may apply to set aside a defective demand. Further, if payment is not forthcoming, then a decision will have to be made whether to pursue insolvency proceedings against the debtor, or decide simply to take court action instead. So it is necessary to assess the position and type of claim at the outset to ensure the correct procedure is adopted. given their success, the potential shortcomings of statutory demands are often overlooked, but it might make more sense to commence court proceedings at the outset.