How to serve or challenge a Statutory demand

What is a Statutory Demand?

A statutory demand is a demand for payment by someone who is owed money [called “the creditor”] by an individual or a company. A special form must be used. The form depends on when the debt is payable and whether it is owed by an individual or a company. The usual time limit is 6 years and the demand has to be made or “served” in a special way. When the individual or company that owes you money [the ‘debtor’] receives a statutory demand, they have 21 days to either pay the debt or reach an agreement with you to pay. If they don’t respond, if the debt is large enough, you can apply to the court to bankrupt your debtor [if they are an individual] or wind them up [if they are a company]. The court fees are at present £280 for an individual and £1,600 deposit for a company.

If a demand is made on you and you don’t agree with it you can challenge it and get it “set aside” if you are an individual. A company challenges a statutory demand in a different way by applying to stop the winding up. If you make a demand which is unjustified you can be ordered to pay the debtor’s legal costs.

Paul Ashwell offers expertise across the full range of commercial and property law. If you require his services, please get in touch with our clerks who will be able to put you in contact with him.