What is a Statutory Demand?

A Statutory Demand is a demand for payment of a debt over £750. It is also a warning that your creditor may start bankruptcy proceedings against you if you don’t pay for it within 21 days. A creditor does not need to get the court involved to serve a Statutory Demand.

It is worth noting that no one can push for bankruptcy unless you owe them £750 or more. So if you receive a Statutory Demand, you could consider paying enough of the debt to bring the total under that minimum. This is not the best way of managing your debt – and you will still need to deal with the remaining debt – but at least you will no longer face the immediate threat of bankruptcy.

Dealing with a Statutory Demand

If you receive a statutory demand, you can:
·         Pay the full amount immediately
·         Make a reasonable offer- see if your creditor will write off the rest of the debt if you pay a substantial percentage of it
·         Offer to pay the amount in instalments
·         Apply to the county court to have the statutory demand set aside.

Setting aside a Statutory Demand

You can apply to have a statutory demand set aside if:
·         You have a counter claim (the creditor owes you money)
·         The amount in question is less than £750
·         You dispute that you owe the money
·         The creditor is holding something of yours for security – something which is worth as much as or more than the amount mentioned in the statutory demand

If you decide to apply to have a statutory demand set aside, you will have 18 days to do so. You will need forms 6.4 and 6.5 from the county court.

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