Statutory Demand Solicitors
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Statutory Demand Solicitors
A statutory demand isn’t just another piece of paperwork. It’s a formal legal notice that can apply intense pressure on a debtor, or pose a serious risk to you or your business if ignored. So, whether you’re looking to issue a demand to recover what you’re owed, or you’ve just had one land on your desk, what you do next matters.
Our experienced statutory demand solicitors cut through the complexity, guiding you through the strict rules, short deadlines, and smart strategies needed to safeguard your position or maximise your recovery.
For your free initial consultation, please call us today on 020 7467 3980. Alternatively, you can complete the enquiry form on this page, and our insolvency solicitors will be in touch.
Our statutory demand services
With deep expertise in insolvency law and a results-focused approach, we work quickly to assess your situation, advise on the best course of action, and take decisive steps to protect your position.
Our statutory demand solicitors help with:
- Issuing statutory demands: Drafting and serving demands that comply with the Insolvency Rules 2016. Ensuring they are correctly formatted, accurate, and lawfully served.
- Responding to statutory demands: Advising debtors on whether to pay, settle, or apply to set aside a demand.
- Challenging invalid demands: Identifying defects in the form, content, or method of service, or showing the debt is genuinely disputed, to render the demand unenforceable.
- Negotiating settlements: Reaching practical repayment or settlement agreements to avoid insolvency proceedings while protecting commercial relationships.
- Preparing injunction applications: Preparing urgent court applications to prevent creditors from presenting winding-up petitions where the debt is disputed or other defences apply.
- Advising on next steps after non-compliance: Guiding creditors on presenting winding-up or bankruptcy petitions following expiry of the statutory period.
- Alternative enforcement options: Exploring other debt recovery methods where a statutory demand is unsuitable or strategically unwise.
What is a statutory demand?
A statutory demand is a written demand for payment. It lets debtors know that if they do not pay their debts (or come to another acceptable arrangement) within 21 days, the creditor may start insolvency proceedings against them.
Key points about statutory demands:
- They must be in a prescribed legal format using the official statutory demand forms (SD1, SD2, SD3 or SD4)
- Every statutory demand must clearly warn that failure to comply can lead to winding‑up or bankruptcy, and specify the compliance period (usually 21 days)
- For individuals, the debt must be £5,000 or more to trigger bankruptcy. For companies, £750 or more to trigger insolvency action. As such, statutory demands for smaller debts are rare and may be seen as an abuse of process
- Statutory demands can only be used for undisputed debts that are fixed and certain.
When are statutory demands used?
Creditors use statutory demands to apply severe, immediate pressure for repayment, whether the debtor is an individual or a company. Typical scenarios where a statutory demand may be used include:
- Where a supplier owes money for goods or services that remain unpaid despite repeated reminders
- Where a lender seeks to recover a loan, after the borrower stopped making repayments
- Where a contractor has been left out of pocket and wants to prompt payment without going through lengthy court proceedings.
Our statutory demand solicitors will take the time to understand your situation, then craft a clear, tailored strategy to achieve the best possible outcome for you.
Why you must never ignore a statutory demand
If you find yourself facing a statutory demand, we strongly recommend contacting a solicitor immediately to help you avoid insolvency proceedings.
- Individuals. If you’re made bankrupt, most of your assets will be taken over by the Official Receiver or a trustee. They can sell these assets to pay your debts. You’ll also face financial restrictions, such as limits on borrowing, until your bankruptcy ends.
- Companies. Ignoring a statutory demand can lead to a winding-up petition. If granted, this results in compulsory liquidation, with control of the business passing to a liquidator, bank accounts frozen, and operations brought to an end.
Acting quickly can help protect your assets and give you more options.
What if you cannot pay within 21 days?
If you do not dispute the debt but can’t pay it in full within 21 days, there are options to avoid immediate insolvency proceedings.
- Negotiate an agreement to pay in installments. This should be done as soon as possible with your creditor, and you should ensure you comply with the terms of any agreement reached.
- Reduce the debt below the insolvency threshold: Where possible, you should try to reduce the amount owed so that a bankruptcy or winding-up petition cannot be presented against you.
Our statutory demand solicitors can negotiate on your behalf to help protect your position, reduce the risk of insolvency action, and buy you time.
What if the debt is disputed?
If you dispute the debt, act fast. A disputed debt is grounds to set aside a statutory demand for individuals or, in the case of companies, seek an injunction to prevent a winding-up petition.
Our statutory demand solicitors will urgently assess your case and prepare the correct court application to challenge the demand.
Applying to set aside or challenge a statutory demand
If you’re an individual, you can ask the court to set aside a statutory demand. Companies can’t cancel a demand in this way, but they can apply for an injunction to stop the creditor from starting winding-up proceedings. People often still call this “setting aside” the demand.
A debtor can challenge a statutory demand on several grounds, including where:
- They have a valid counterclaim, set-off, or cross-demand equal to or exceeding the debt
- The debt is disputed, and the court finds the dispute to be substantial
- The creditor holds security for the debt that equals or exceeds its value
- The wrong form was used for the statutory demand, or mistakes were made on the form
- The statutory demand was not correctly served.
This list is not exhaustive, and there may be other grounds where the court believes the demand should not stand.
Time limits are critical
It is essential to act quickly if you have received a statutory demand and want to challenge it.
- For individuals, an application to set aside must usually be made within 18 days of being served
- For companies, there is no formal “set aside” process. Instead, you must act quickly to apply for an injunction before a winding-up petition is presented
- Once a valid challenge is lodged, the 21-day compliance period is usually paused/suspended pending the outcome.
While the court can extend deadlines, it’s always best to act within the time limits to preserve your full range of options.
Who our statutory demand solicitors help
We act for a wide range of clients in statutory demand matters, including:
- Creditors: Seeking fast, cost-effective debt recovery.
- Companies: Responding to demands to prevent winding-up petitions.
- Individuals: Applying to set aside demands to avoid bankruptcy.
- Directors: Protecting personal and company interests during disputes.
- Insolvency practitioners: Advising on recovery strategies and compliance.
- Investors and stakeholders: Safeguarding positions when a debtor is under threat of insolvency.
FAQs about statutory demands
The cost varies. Professional drafting is often a few hundred pounds, and serving the demand via a process server or recorded delivery can add around £20–£100. While the initial outlay is usually modest compared to court proceedings, costs can rise if the demand is challenged or the matter escalates.
You are not legally required to use a statutory demand solicitor. Any creditor can prepare and serve one themselves using the correct government form.
However, statutory demands are technical documents with strict legal requirements. Even small mistakes in the wording, amount claimed, or method of service can render them invalid, or expose you to a costs order if the debtor successfully challenges it. Using a solicitor ensures the demand is drafted accurately, served lawfully, and backed by a sound legal strategy. This helps you avoid wasted time, unnecessary expense, and potential legal setbacks.
Yes. Creditors can formally withdraw a statutory demand by giving written notice to the debtor. This typically happens once the debt has been paid, settled, or otherwise resolved to the creditor’s satisfaction.
To halt a statutory demand, you need to remove its legal foundation. This could mean paying the debt in full, agreeing a repayment plan, or applying to have it set aside if there are valid grounds. A statutory demand solicitor can advise on the best route for your situation.
If set-aside, the demand cannot be used to start bankruptcy or winding-up proceedings, although the creditor may still pursue the debt through other legal means, such as a county court claim.
The demand is active from the day it is served. It stays in place until the debt is paid, an agreement is reached, or the court removes it. The most crucial period is the first 21 days after service, as this is when the creditor gains the right to start insolvency proceedings.
Contact our statutory demand lawyers
Whether you are facing a statutory demand or considering issuing one, acting quickly and strategically is key to protecting your position and achieving the best outcome.
Why clients choose Summit Law:
- Fast action: We can respond or prepare a statutory demand within hours if necessary.
- Specialist insolvency expertise: Our statutory demand lawyers understand the complex rules and technical requirements that can make or break a case.
- Clear strategy: We explain your options in plain English and help you decide on the most effective route.
- Tailored approach: We factor in your financial position, commercial relationships, and long-term goals.
For your free consultation, call us on 020 7467 3980 or use our online enquiry form, and one of our statutory demand solicitors will call you back.
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