Statutory Demands - Advice for Debtors

The solicitors at Clough & Willis can help with all aspects of statutory demands, including making a dispute if you are a debtor that has been accused of owing money. 

Contact our friendly, knowledgeable legal experts today by calling 0800 083 0815, or fill out an online enquiry form and we will get back to you at a time that is suitable for you.

What is a statutory demand? 

A statutory demand is a formal document by which a creditor can demand payment from a debtor. The debtor has a limited period in which to pay, after which, the creditor can petition to bankrupt an individual, or wind up a company.

What should I do if I receive a statutory demand?

If you have received a statutory demand, what you should do depends on whether you are an individual or a company. 

Advice for individuals

If you dispute the debt, you can apply to set aside the statutory demand in court. The application is made to the local County Court (which should be specified on the demand) and has to be supported by evidence.  

If the Court is satisfied that there is ground for setting aside the demand on reading the application, it will list a hearing that you will have to attend to show the District Judge why the debt is not owed. If the judge agrees, the demand will be set aside and you may be able to recover your legal costs. 

If you cannot dispute the debt, you can either pay the debt or take advice from a solicitor about what other options may be open to you  (such as a voluntary arrangement - an IVA). 

Advice for businesses

Businesses do not have the same option as individual debtors to set a debt aside. If the debt is genuinely disputed, then the company can make an application to the Court for an injunction, which could prevent a petition being issued. If this has already been issued, an injunction can be sought to prevent the petition from being advertised. 

It is not enough to send a defence to the creditor: a Petition may still be issued and costs incurred. 

If the debt cannot be disputed, then the company should pay or consider insolvency options, such as company voluntary arrangements (a CVA), administration or other rescue options.