How Many Days Each Debt Notice Actually Gives You
Director penalty notice, statutory demand, winding up application or garnishee. How long each one leaves you, and what is fundable inside that window.
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Debt Notices · Deadlines · Property-Secured Funding
Every notice starts a different clock. The days left on that clock, not the size of the debt, is what decides which funding is realistically available to you.
Quick Answer
Each notice runs on its own clock, and the time left on that clock decides which funding is still open to you. Some leave weeks. A garnishee is already in effect when you hear about it. The table below sets out what each one actually leaves you.
Also called: ATO debt notice, creditor demand notice, debt recovery notice.
Which notice have you actually received?
Four different documents get called the same thing in conversation, and they run on completely different clocks. Two of them give you a fixed statutory period of 21 days. One hands the timetable to a court. One is already in effect before you read it.
So the label at the top of the page is the single most useful piece of information you hold, and the clock starts when the notice is issued or served, not when you open it. That distinction is worth more than it sounds.
Post and address lag are real. A director penalty notice goes to the address the ATO holds for you at ASIC, not to the company's registered office, so an out-of-date personal address on the register costs days you never get back. In deals I have seen, the first few days of a window are routinely lost exactly that way.
| Notice | Days you have | When the clock starts | What ends it |
|---|---|---|---|
| Director penalty notice | 21 days | The day the ATO posts the notice, or leaves it at the address registered with ASIC | Payment of the liability, or a statutory alternative taken inside the period on a non-lockdown notice |
| Statutory demand | 21 days | From service of the demand on the company | Payment, a negotiated resolution, or a successful application to set the demand aside |
| Winding up application | Set by the court, typically weeks | From filing, with the matter then listed for hearing | Withdrawal, dismissal, or an order of the court |
| ATO garnishee notice | None, it is already in effect | Immediately on issue to the third party holding your money | Withdrawal by the ATO, or the debt being dealt with |
| Payment arrangement default | No fixed period, weeks if addressed early | From the missed instalment date | Reinstatement, a new arrangement, or payment of the balance |
How long does a director penalty notice give you?
A director penalty notice gives you 21 days, and the ATO's own wording is that the 21 days starts on the day it posts the notice, or leaves it at the address registered with ASIC. It does not start when you open the envelope.
Source: Director penalty regime, Australian Taxation Office, as at August 2026.
That is the shortest fixed statutory window most directors will ever deal with, and it is the one most often misread. Because the count runs from posting, the practical runway is usually shorter than the number on the page by whatever the post consumed.
Inside that period the options are set by the regime itself, and they are not all available on every notice. Our director penalty notice glossary entry carries the definition and the director penalty notice guide covers the regime in full. One point catches people out constantly: entering a payment arrangement does not remit the penalty, so negotiating instalments does not pause this clock.
What matters for this map is narrower. The funding window is 21 days minus whatever the post consumed, and any facility that cannot realistically settle inside it is not a live option however attractive the pricing looks.
How long does a statutory demand give you?
A statutory demand gives the company 21 days from service to pay the debt, reach a resolution, or apply to have the demand set aside. Of everything on this map, this window carries the most usable runway.
The amount is fixed, the deadline is fixed, and nothing has yet been filed in court. The statutory demand guide sets out the options inside the window in detail, and whether you have grounds to set a demand aside is a question for a solicitor rather than a broker.
There is also a floor on what can be demanded this way. Under section 459E of the Corporations Act the debt, or the total of the debts, has to be at least $4,000, which is the statutory minimum. Below that a creditor has to use ordinary recovery instead, so a small unpaid invoice cannot arrive as a statutory demand at all.
Source: Winding up proceedings based on an unsatisfied statutory demand, Federal Court of Australia, as at August 2026.
From a funding point of view the important consequence sits at the end of it. An unanswered demand supports a presumption of insolvency, which is what a creditor then uses to move toward liquidation. Our companion post on what you can fund once a winding up application is filed covers the stage after this one. Every week spent inside the demand window is worth several spent after it.
How long do you have once a winding up application is filed?
Once a winding up application is filed, the time you have is set by the court's listing rather than by you or the creditor, which removes the flexibility every earlier stage had. In practical terms that is usually weeks rather than months, and the exact date is printed on the application.
The listing is also a matter of public record, and the consequence for a trading business is often immediate. Banks review facilities, suppliers tighten terms and existing lines are sometimes frozen well before any hearing.
The finance-side reading is simple. The window is real but it is not generous, it shrinks as third parties react, and any funding has to settle and pay the debt with time left over for the application to be withdrawn or dismissed. Speak to your accountant or an insolvency practitioner about the legal path before you commit to a funding path, and read the detail of what is fundable at that stage alongside this.
How fast does a garnishee notice move?
A garnishee notice moves faster than anything else on this map, because it is not a warning at all. It is an instruction to a third party who is already holding your money.
The ATO can issue it to a bank or to a debtor of the business, and the first sign for most directors is a balance that has changed rather than an envelope that has arrived. This is the row where you are dealing in days, not weeks.
The ATO garnishee notice guide covers how the mechanism works and how much can be taken, and our post on the 72-hour response sequence covers what a fast property-secured response actually looks like. The planning point is that a garnishee leaves no preparation window at all. Whatever was going to be arranged has to have been arranged already, which is the strongest argument there is for treating the earlier notices seriously.
Which funding options fit inside each window?
Match the funding to the window, not to the debt, because the deadline decides the instrument. A facility that takes several weeks of assessment is irrelevant inside a garnishee, and a short-term facility priced for speed is the wrong answer when you still hold a full demand period.
Tier 1, weeks available
An arrangement default or an early demand. Conventional refinance and non-bank business lending are still realistically in range, and a second mortgage behind an existing first is usually the cheapest property-secured option because consent and documentation have room to run.
Tier 2, a fixed statutory period of 21 days
A director penalty notice or a statutory demand. Major banks are typically out on timing alone. This is the natural home of private lending and of specialist funders who assess on security and exit rather than on trading history.
Tier 3, a court timetable
A filed winding up application. Funding is only relevant where the company is solvent but illiquid and there is genuine equity. Facilities are short, priced accordingly, and structured around a payout that ends the application.
Tier 4, already in effect
A garnishee in flight. Only the fastest property-secured instruments are realistic, which in most files means caveat funding where the equity supports it. The caveat loans guide covers how that mechanism works, what it costs and where it fails. Settlement timing is indicative and varies by lender.
Two structural points sit underneath that ladder. The first is security. Every one of these options is secured against property, and a lender will want to understand the existing first mortgage position and any registration already sitting over business assets before it prices anything, which is what a search of the Personal Property Securities Register is for: goods can be repossessed by a registered holder even where the business has paid for them.
The second is pricing. A private mortgage lender is pricing the risk of a distressed timetable, not just the loan-to-value, so cost varies by lender and by how many days are left.
| Notice | Time typically available | Usually fundable, where equity allows | Usually not realistic |
|---|---|---|---|
| Payment arrangement default | Weeks, if addressed early | Refinance, non-bank business lending, second mortgage | Nothing is ruled out on timing alone at this stage |
| Director penalty notice | 21 days from posting | Second mortgage, private lending, specialist property-secured funding | Major bank assessment and unsecured facilities requiring full financials |
| Statutory demand | 21 days from service | Second mortgage, private lending, caveat funding as a fallback | Major bank refinance where a full valuation and full assessment are required |
| Winding up application | A court timetable, not a period you control | Short-term private lending or caveat funding against genuine equity | Any facility relying on an unaffected trading position or a clean public record |
| ATO garnishee notice | Already in effect on issue | Caveat funding only, and only where equity and title support it | Anything requiring a conventional assessment or valuation timetable |
Which windows are too short for any lender?
Some windows are too short for any lender, and almost nobody writing about these notices says so, because the pages that rank on them are written by advisers who do not fund anything.
The honest position is mechanical. A property-secured settlement needs a title search, a valuation position, a payout figure where there is an existing mortgage, documents signed and funds moved. Where the remaining runway is a couple of days, that sequence does not fit no matter who you call.
There is a second exclusion that matters more. Funding answers a timing problem, not a solvency problem. Where the business cannot service the debt it already carries, borrowing against the family home to satisfy one creditor moves the exposure rather than resolving it, and in deals I have seen that is the decision directors most regret.
If the company is insolvent rather than illiquid, the right conversation is with an insolvency practitioner and your accountant, not with a broker. Where the business is solvent, has equity and simply cannot convert it fast enough, that is exactly the gap a broker exists to close. Our post on which debt to clear first when cash is tight is the companion for working out whether the debt in front of you is even the one to fund.
What should you do in the first 24 hours?
In the first 24 hours the goal is to fix the date, not to fix the debt. Read the notice and record what it is, when it was issued or served, and when it expires.
Then confirm your own dates with your accountant rather than working off a general guide, because a single day of misreading changes which instrument is still available to you.
After that, three things run in parallel. Get professional advice on the legal path from your accountant or an insolvency practitioner. Establish what property equity actually exists, including the current payout on any first mortgage and whether a guarantor or director's security is already committed elsewhere.
And get an early read on funding feasibility, because the answer changes daily. The guide to borrowing against a tax debt covers the costs and risks candidly, and our post on what lenders need first sets out the evidence a credit desk asks for. If the debt is large enough to have been reported, what a disclosed tax debt does to your credit file is the next thing to read. To know quickly whether the window is workable, check eligibility and get a straight answer rather than a maybe.
Notices are usually read as a hierarchy of severity. They are more usefully read as a hierarchy of days. An arrangement default leaves weeks, a registered second mortgage or a refinance still fits, and the cost of solving it is at its lowest.
A statutory demand or a director penalty notice leaves 21 days, which pushes the file toward specialist funders. A filed application puts the timetable in the court's hands. A garnishee has already happened. At every step down that ladder the options narrow and the cost rises, and none of it depends on the size of the debt.
Key takeaway: Work out how many days you have before you work out how much you need, because the deadline decides the instrument.Frequently Asked Questions
No. On a director penalty notice the 21 days starts on the day the ATO posts the notice or leaves it at the address registered with ASIC, so the count is already running by the time you read it. That is why an out-of-date address on the register is expensive rather than merely untidy. Check the date printed on the notice, not the date it reached you, and read our post on what a payment plan does and does not change before you assume negotiating buys time.
Help with an ATO garnishee notice starts with the fact that a garnishee is already in effect when you hear about it, so there is no waiting period to plan inside. The notice is issued to a third party holding your money, typically a bank or a debtor, and funds can move before you have finished reading it. That means two things at once: engage with the ATO or your accountant on the underlying debt, and, where you own property with equity, get a read on whether a caveat loan can settle inside the window.
After the 21 days on a statutory demand expire without payment or a set-aside application, the creditor can rely on a presumption that the company is insolvent and use it to apply to wind the company up. That is the point at which a debt problem becomes a solvency problem, and it is why the 21 day window is the most valuable funding window in the whole sequence. Speak to your accountant or a solicitor about the legal options, and read what happens next in our post on a filed winding up application.
A private lender is a non-bank funder lending its own or investor capital against security, most often property, on commercial terms and on a much shorter assessment timetable than a major bank. In a notice situation that speed is the entire point, because the deadline decides the instrument rather than the price. Pricing reflects the risk and varies by lender, and a private facility is a short-term step toward a resolution rather than a long-term answer.
Where you hold two notices at once, deal first with the one whose clock expires soonest and whose consequence is hardest to reverse, which in most files means a garnishee or a filed winding up application ahead of a longer-dated demand. Ordering by deadline is not the same as ordering by size, and the largest debt is often not the most urgent one, as our post on which debt to clear first explains. Confirm your own dates with your accountant rather than a general guide.
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