When an individual or business owes a significant amount of debt to their creditors, a statutory demand may be issued to formally insist that the debts be paid. This is a significant legal step that should not be taken lightly, as failing to respond to a statutory demand can result in legal action.
At Clough & Willis, our solicitors have specialist expertise in this area of the law, and can provide you with support whether you are issuing a statutory demand or receiving it. We can advise you throughout the entire process, helping you to understand what actions to take and how to resolve the matter efficiently.
Disputes over debt can be damaging and acrimonious, potentially resulting in legal conflicts and bankruptcy. By getting the right legal advice, you will be able to come to an effective solution that works best for all of the parties involved.
To discuss the statutory demand process in a free, no-obligation chat with our lawyers - based in Bolton and Bury - call us on 0800 083 0815, or fill out an online enquiry form and we will get back to you at a more convenient time.
How we can help
At Clough & Willis, our expert statutory demand solicitors can advise you on everything you will need to consider when serving or receiving a statutory demand, tailoring our guidance to your specific needs and financial situation.
If you are a creditor issuing a statutory demand, we can provide advice on the following:
- Outlining the statutory demand process, including advice on statutory demand thresholds and timescales
- Assisting with drafting a statutory demand to ensure the communication is clear and precise
- Advising on how the statutory demand should be served
- Discussing further legal options if the statutory demand is ignored, or the debt cannot be repaid
If you are a debtor receiving a statutory demand, we can advise on the following:
- Presenting your options on how to respond to the statutory demand, whether this be by repaying the amount in full, agreeing a series of paid instalments or negotiating generally
- Disputing a statutory demand when there are legal grounds to do so
When a statutory demand is received, it is important to act quickly to acknowledge receipt and find a path forward. By getting in touch with a legal expert as soon as possible, it will be easier to make the right choice for your circumstances.
With offices based in Bolton and Bury, Clough & Willis has years of experience in helping individuals and businesses across the North West and further afield to effectively manage debt-related matters. We can provide you with the pragmatic advice you will need when dealing with a statutory demand.
What is a statutory demand?
A statutory demand is a formal demand issued by a creditor for the repayment of an outstanding debt.
Once issued, the debtor must pay off what they owe within a fixed time period, according to the terms of the demand. If they are unable to do so, they will be deemed to be unable to pay their debts, meaning they can be declared bankrupt, or have their business wound up.
The debt threshold for a statutory demand to be issued is £5000 for an individual, or £750 for a company.
A statutory demand can be used as an alternative to commencing proceedings through court, or as a method of enforcement for creditors who have already received a court judgement for an outstanding debt.
How long does a statutory demand last?
When the debtor receives a statutory demand, they have a period of 21 days in which to respond, apply to set aside the demand or request that the creditor withdraws it. During which they must either pay off the debt in full, or reach an agreement with the creditor to settle the amount.
If this does not happen, or the demand does not receive a reply, the creditor can apply to bankrupt the debtor or wind up a company.
Who can serve a statutory demand?
Ideally, a statutory demand will be personally served to an individual, usually by a process server who will visit their home or place of business to hand the demand over directly.
In some circumstances, creditors may also send a statutory demand though the post, via fax or by email.
Can I dispute or challenge a statutory demand?
If the debtor wishes to dispute a statutory demand, they must first apply to their local bankruptcy court as soon as possible to have the demand set aside. This application must explain why the debt has not been paid and why it is being disputed.
Once the application has been made, it will be listed for hearing, and the creditor will have an opportunity to respond to the application and any supporting witness statements. If a creditor is not willing to withdraw their statutory demand, the court will hold a hearing to decide whether or not it is appropriate for the demand to be relied upon or set aside.
The hearing will provide an opportunity for the debtor to challenge the debt and defend against any action that may be brought through the courts, or to find another way of resolving matters with the creditor. As such, it is best to seek guidance from a solicitor before beginning the process of disputing a statutory demand.
Need help right away?
Contact Clough & Willis
Find out more about how we can help you with any aspect of the bankruptcy or insolvency process by getting in touch with Clough & Willis today. Our offices in Bury and Bolton are easily accessible for customers in the north west.