Clough & Willis Solicitors, Commercial and private legal services UK

Statutory Demands – I've Received One!

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) debtor.

The non payment of the statutory demand will be taken as evidence by the Court that the debtor is insolvent and unable to pay its debts as and when they fall due - which is the definition of insolvency.

I have received one - what should I do?
If you have received a statutory demand what you can do depends on whether you are an individual or a company

I am an Individual - what should I do?
If you dispute the debt you can apply to the Court to set aside the statutory demand. 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, on reading the application, that there is a ground for setting aside the demand it will list a hearing and you will have to attend and 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 from your creditor

If you cannot dispute the debt all you can do now is pay - or take advice about other options which may be open to you (such as a voluntary arrangement - an IVA)

I am a Company director (or officer) and my company has received a demand- what should I do?
There is no "set aside” provision for companies.

If the debt is genuinely disputed then the company can make an application to the Court for an injunction to prevent a Petition being issued. If it has already been issued an injunction can be sought to prevent the Petition being advertised.

Note: is it 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 arrangement (a CVA), administration or other rescue options.

Help
Clough & willis can help with Statutory Demands, advising individuals and companies on how to deal with them.

Contact me Fiona Gaskell or Grahame Henry, on freephone 0800 083 0815 or by email fiona.gaskell@clough-willis.co.uk, grahame.henry@clough-willis.co.uk,



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