A statutory demand is a formal written request that a debt must be paid.
How to serve a statutory demand
You must deliver (serve) the statutory demand by:
- giving it to the individual who owes you money (you should try all their known addresses)
- leaving it at the registered office of the company or partnership that owes money (or the main place of business if they dont have a registered office)
- giving it to the company’s director, company secretary, manager or principal officer
- get a ‘process server’ to serve it for you (a solicitor can arrange this)
You can only send it by registered post or put it through a letterbox if it cant be delivered in person.
Records you must keep
You must keep a copy of the statutory demand and anything that confirms:
- the time and date you served the statutory demand, e.g. a postage receipt or confirmation from your process server
- the debtor has received the statutory demand
You’ll need this information if your demand is ignored.
If your demand is ignored
If your debtor doesn’t pay the debt or agree to your statutory demand within 21 days, you can:
- start bankruptcy proceedings against any individuals who owe you £5,000 or more
- wind-up a company that owes you £750 or more
You have 4 months to apply to bankrupt or wind up your debtor.
Setting aside a statutory demand
If you don’t agree with a statutory demand you’ve been given, you can apply to challenge it and get it ‘set aside’.
- You can be made bankrupt or your company wound up if you ignore a statutory demand
- You must apply to the court named on your statutory demand. Contact a solicitor or your nearest county court if you’re not sure where to send your application
- You can’t challenge a statutory demand if it was served on a company.You can apply to the court to stop (‘restrain’) your creditors from applying to wind up your company. You must do this within 21 days of getting the statutory demand
- Any bankruptcy petitions the creditor has already filed against you will usually be suspended until the court reaches a decision
The court won’t usually set aside a statutory demand if it was served on you following the judgment of another court unless, for example:
- you think the creditor owes you the same amount as your debt, or more
- the amount on the statutory demand is secured
You must apply to challenge the statutory demand within either:
- 18 days if you were in the UK when you got the statutory demand
- 21 to 34 days if you were in another country when you got the statutory demand
If the deadline is during a weekend or on a bank holiday, you have until the next day the court is open to apply.
You might be able to get an extension in some circumstances – contact the court to find out what these are.
Specific advice should be obtained before taking action, or refraining from taking action, on any of the issues covered above.
For further information, please contact one of our Partners who will be able to assist you.