Statutory Demands

If you have been served with a statutory demand, it is likely that it is being used as a tool to exert pressure upon you to pay a debt. It can be a powerful tool as if it is used correctly, it can be a pre-cursor to a winding up petition which could be presented at court after only 21 days of you receiving the statutory demand if payment is not made and that could have extremely serious consequences.

A statutory demand should only be used when a debtor is claiming an undisputed debt, over £750. It must set out clearly the amount said to be due and owing, detailing separately any interest claimed. It must be correctly signed and then served upon you.

If the statutory demand does not meet all necessary criteria, or has not been served upon you correctly, the debtor will not be able to proceed with a winding up petition.

If the debt claimed within the statutory demand is disputed by the company, the company will need to inform the debtor immediately (and certainly within the 21 day time limit) of the reasons why it is disputed in an attempt to obtain confirmation from the creditor that it will not proceed with a winding up petition.  This then gives the parties breathing space in order to review and resolve the matter without the threat of a winding up petition. Although this may stop the presentation of the petition itself, it does not stop the debtor from bringing a claim against you in the county courts.

If the debtor proceeds with the presentation of a winding up petition despite being aware that the debt is disputed, you may wish to apply to the court for an injunction.