Makayla Phillips explains What is a Statutory Demand and can it help my business chase creditors?

Makayla Phillips explains what a Statutory Demand is and how this can help your business

Makayla Phillips is a solicitor experienced in acting for individuals, company directors, creditors, businesses and insolvency practitioners, providing clear and strategic legal advice at every stage of the insolvency process.

She explains what a Statutory Demand is and how this can affect or help you in this FAQ guide.

Q. What is a statutory demand?

A. A statutory demand is a formal written request for payment of a debt and it is often the first step before bankruptcy or winding-up proceedings. If a debtor fails to pay the sums due under the statutory demand, fails to set it aside or reach a different agreement with the creditor, the demand can be used as legal proof of insolvency, allowing the creditor to begin court proceedings to make the individual bankrupt (for a sum exceeding £5000.00) or wind up the company (for a debt of £750 and over).

Q. Who can serve a statutory demand

A. Anybody who is owed money by an individual or a company can serve a statutory demand.

Q. What should I do if I receive a statutory demand?

A. If you or your company receives a statutory demand, you have 21 days from the date of service to either (a) pay the debt in full (b) reach a repayment agreement with the creditor. Alternatively, within 18 days from the date of service you can apply to the court to have the statutory demand set aside.

Ignoring a statutory demand could result in the creditor applying to the court for your bankruptcy (if you are an individual) or for your winding up (if you are a company).

Q. What grounds do I have to challenge a statutory demand?

A. A statutory demand, may be set aside on one or more of the following grounds:

(i) if the debt is disputed on substantial grounds.

(ii) if the debtor appears to have a counterclaim, set off or cross demand which equals or exceeds the amount of the debt specified in the statutory demand.

(iii) if the creditor holds security equal to or exceeds the value of the debt.

(iv) if the court is satisfied on some other grounds that the demand ought to be set aside.

If you need help do get in touch with Makayla

Telephone: 01708 333711

Email: Makayla.Phillips@fbarnes.co.uk