Statutory Demands: Individuals

A statutory demand is a formal demand for payment which is issued by a creditor owed money. A statutory demand can be served on a company or an individual.

This information relates to statutory demands served on individuals. For information relating to statutory demands served on companies, please following this link.

A statutory demand is the first step a creditor will take to enforce a debt of at least £5,000 owed to them by an individual. Once a statutory demand is served on a debtor, they have 21 days to satisfy the debt (if it is not disputed) or 18 days to apply to court to set the statutory demand aside.

If the debtor fails to settle the debt or make an application to court to have the statutory demand set aside, the creditor will be able to use the statutory demand as evidence that the debtor is unable to pay their debts and therefore a bankruptcy petition can be presented.

A debtor can apply to court to set aside a statutory demand if the debt is genuinely disputed or the debtor has a counterclaim against the creditor which reduces the debt owed to the creditor to an amount which is below the bankruptcy threshold (£5,000).

Should you require any assistance in either issuing or applying to set aside a statutory demand, call our team for an initial discussion.

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