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Statutory Demand

Statutory Demand

What is a Statutory Demand?

A statutory demand is a written warning sent from a creditor. It will threaten you with court action if you are unable to pay your debt or find an alternative solution to your current agreement.

If you don’t fully repay your debt or find an alternative arrangement within 21 days of receiving the demand, your creditor can apply to make you bankrupt, unless their demand has been cancelled or postponed.

What can I do if I receive a Statutory Demand?

You have several options to respond to a statutory demand. The key is not to ignore it if you don’t want to go into bankruptcy. Creditors will probably try to make you bankrupt if you do not comply with their initial statutory demand.

We can offer you expert advice on what to do if you receive a statutory demand. Our experts will provide the best way forward for you and your business.

If you believe that the statutory demand can be challenged then you can appeal to the court to try and overrule the statutory demand. This could be because you no longer owe the money or perhaps the creditor has taken too long to bring this action forward.

You can only take this action within 18 days of the statutory demand being deserved. The court might then decide to cancel the statutory demand and your creditor will then be unable to keep on trying to make you bankrupt.

How can I act if I receive a Statutory Demand?

Pay the debt in full: The easiest solution that benefits both you and your creditor.

Pay in instalments: You could agree on a timeline with your creditor, allowing you to make the repayments over a set period.

Write off the debt: You might ask your creditor to write off your debt if you have no assets of worth to give and no money to offer. They would only consider this if there was no tangible way that they could get their money back.

Put your property on the line: If you own your own home, you could put that on the line. This would give the creditor some ground to hold you to account.

Go for an IVA: An individual voluntary arrangement (IVA) is an alternative solution to bankruptcy but it can have some costly initial fees.

Lower money owed to below £5,000: Creditors cannot apply to make you bankrupt if you owe less than £5,000.

Accept bankruptcy: If you have no way of paying back the debt, you might want to accept bankruptcy as your best solution.

If you want more information on any of these options, please do not hesitate to get in touch with us. Our expert advisors will help plan the best pathway for your financial future.

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How do I tackle a Statutory Demand?

To tackle the statutory demand, you will have to act within 18 days of it being served.

▪️ Use the IAA form to apply. This form can be completed online, printed off, dated and signed, before being sent to the court.

▪️ You must feature specific information in the application. We can help you with this part.

▪️ Fill out a witness statement in support of your application.

What happens if I dispute the case?

You might still be able to apply to set aside your statutory demand, even if you have missed the 18-day time limit, but you will need to provide good reasons if there is any form of delay.

▪️ Give your details so that you can be identified by the court.

▪️ Explain that you are asking to set aside a statutory demand and give the reasons why.

▪️ Include evidence of the statuary demand and any other pieces of relevant evidence.

▪️ Sign and date the application.

The court may dismiss your application without a hearing if you have not given a good enough reason for your application itself, or for being late (if applicable).

Taking these things aside, the court will set a time and a place for the hearing. The court will give you at least five business days’ notice for the hearing.

What are the next steps?

If you are facing a Statutory Demand and you are still unsure what to do, don’t hesitate to contact us.

You can contact us through WhatsApp or on our live chat feature below.

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    Statutory Demand FAQs

    What happens if I make a mistake on a form?

    The court are unlikely to turn down a statuary demand if there is a minor mistake or two on the forms, such as a slightly misspelled name. However, they may act if there are many glaring errors on the piece.

    In short, simply read over the form twice before sending it off. You don’t want anything to be playing on your mind.

    Can I overturn a Statutory Demand if court action has been taken?

    You will not usually be able to overturn a county court judgment that is placed against you for a debt. The court judgment will be seen as evidence that you owe the debt and that you will have to repay it.

    In some instances, a creditor may issue a court claim towards a debt that you do not owe. If you put a defence in to counter that claim, the creditor will have to show a good reason why they have gone forward with the statutory demand on a disputed debt.

    Can I be made bankrupt without a statutory demand?

    You don’t always need to have a statuary demand before being made bankrupt. If a creditor had a county court judgment or another court order that they haven’t been able to put through, they can make you bankrupt without sending a statutory demand over to you.

    If you have and Individual Voluntary Arrangement (IVA) that has failed, the insolvency practitioner or creditors can make you bankrupt without sending you a stat demand.

    What if I cannot set the statutory demand aside?

    You have 21 days since the statutory demand was served on you to have it overturned, even if you have failed to set it aside in the first instance.

    Creditors who petition for your bankruptcy more than four months after serving the statutory demand should explain why there has been a delay. The court should consider this when deciding whether or not to make you bankrupt.

    If you have missed a chance to set your stat demand aside then you may now have a hearing date. There is still an opportunity for you to halt the bankruptcy.

    You will need to provide a notice to the court where your hearing will be held. The details of the court should be on the hearing letter.

    You should fill out a Form Bank 6 for your notice, highlighting your opposition to the bankruptcy order. You must send it to the court and the creditor so that they receive it at least five business days before the hearing.

    Your application needs to provide enough information so that the court can identify who you are and your case. Your reason for objecting must also be clear.

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