Statutory Demand| What Is A Statutory Demand?
What Is A Statutory Demand? A statutory demand is a formal request for payment of a debt. It can have serious legal consequences and it is important to understand the implications and the next steps that will need to be taken if payment is still not received after the demand has been served.
What Is A Statutory Demand?
A statutory demand is a formal legal request for payment of a debt. It can be served on an individual where the debt owed exceeds £5,0000 and on a company where the debt exceeds £750. The debt should not be more than six years old.
When Should I Issue A Statutory Demand?
A statutory demand should only be issued where the debt is not disputed.
If there is a disagreement over the amount of the debt or whether the debt is owed, then a county court claim will usually be the best route. If you are not sure whether a statutory demand is the right option for your claim, you are advised to seek legal advice before proceeding as there can be penalties if you follow an incorrect route.
How to issue a statutory demand
To issue a statutory demaind you complete a standard form. This needs to include full details of both you and the debtor as well as information about the debt, including when it was incurred, what it was for and the amount due as at the date of the demand.
The statutory demand form should then be formally served on the individual or company. You can either give it to them in person or leave it at the registered office of the company or partnership or give it to a director or company secretary or other principal officer.
Alternatively, your solicitor can arrange for a process server to formally serve it on your behalf. They will also supply a sworn statement confirming that this has been done that you will be able to use in any future proceedings.
After A Statutory Demand Is Issued
The debtor has 21 days in which to respond. This could be by agreeing and paying the debt, applying to have the demand set aside or requesting that it be withdrawn.
If the alleged debtor intends to dispute the demand, they will need to apply to the court to have it set aside, explaining why this should be done.
The court will respond with a hearing date, at which both sides will have the opportunity to put their case.
What To Do If Your Statutory Demand Is Ignored
If you have served a statutory demand and the debtor does not respond or agree to pay the debt within 21 days, you can either:
- Commence bankruptcy proceedings against an individual if they owe you £5,000 or more; or
- Issue a winding up petition against a company that owes you £750 or more.
You have four months in which to commence one of these proceedings. If you do not meet this deadline, you will need to explain to the court why you did not before you can go ahead.
Both options are serious undertakings with potential liabilities for the person issuing the proceedings, so you are always recommended to take legal advice before going ahead.
Challenging A Statutory Demand
If you have received a statutory demand but you do not agree with it, you can challenge it and ask the court to set it aside.
You should apply to the court that is named on the statutory demand or ask your solicitor which court to apply to.
If you are a company, you cannot challenge the demand in this way. Instead, you should make an application to stop your creditors from attempting to wind up your company.
If you receive a statutory demand, it is important to act quickly. You have 18 days within which to challenge a statutory demand, provided you were in the UK when it was received. You may have longer if you were overseas.
It is crucial that you do not ignore a statutory demand or you could end up being made bankrupt or having your company wound up. If you need help and advice in respect of the next steps, you should contact an expert solicitor without delay.
Do You Need Help Finding Statutory Demand Solicitors Near Me?
We can match you with solicitors who specialise in debt recovery, to include issuing statutory demands, near to where you live. Our experts are chosen for their high level of legal skill and understanding as well as for the outstanding service that they offer.
Our insolvency experts offer a full range of services, including the following:
- Advising on and issuing statutory demands.
- Bankruptcy petitions.
- Winding up petitions.
- Challenging a debt.
- Advice in respect of insolvency.
- Individual voluntary arrangements.
- Debt relief orders.
Solicitors Near Me Who Deal With Statutory Demands
We can put you in touch with an expert statutory demands solicitor who will have expertise in dealing with all aspects of debt and insolvency. They will be able to give you advice over the best way to proceed and may be able to help you with a number of options for dealing with a debt.