When it comes to debt recovery, few legal tools are as direct and effective as a statutory demand. When you are owed money, understanding the process and the strict time limits involved in sending a statutory demand can be vital in increasing the chances of successful recovery. Used correctly, they can provide a swift and powerful route to resolution.

What is a statutory demand?

In simple terms, a statutory demand is a formal, written request for payment of a debt. 

If a company or individual receives a statutory demand they then have 21 days, either to pay the amount owed or agree terms for repaying it.

Statutory demands should never be ignored as, in a worst case scenario, it may result in bankruptcy for an individual or in a company being wound up.

Individuals may be able to challenge a demand by applying to the County Court to get it ‘set aside’.

Companies cannot challenge a statutory demand however they can apply to stop creditors from winding up the company.

There are certain circumstance where a statutory demand would not be the best way to recover a debt:

  • If a debt is disputed, a statutory demand should not be used
  • Generally, if a debt is over six years old you will not be able to use a statutory demand to recover the amount owed 

Want to recover money?

  • Are you owed money by an individual or a company?
  • Is the debt undisputed?
  • Does the debt exceed £750.00 (for a company) or £5,000.00 (for an individual)?

If the answers to the above are all ‘Yes’ then have you considered serving a Statutory Demand on the debtor?

A Statutory Demand should not be used where a debt is disputed, as the Court frowns upon their use as a debt recovery tool. However, where the debt is unpaid and undisputed, it can be a swift, cost-effective and potent method of recovery:

  • Swift – the debtor has 21 days from the date of service of the Statutory Demand to pay the debt;
  • Cost-Effective – a Statutory Demand is an “out of Court” process, so no Court fee is incurred.  Other than the fees for a Process Server to serve the Statutory Demand (only if the debtor is an individual), the only costs would be ours to prepare the document for you and serve it;
  • Potent – the threat to a debtor is significant: if the debt is not paid, or the Statutory Demand challenged, within 21 days of being served with the Statutory Demand, you would be entitled to present a Winding up Petition (of a company) or Petition for Bankruptcy (of an individual)

Our litigation solicitors are experts in serving Statutory Demands on both companies and individuals and are well-versed in responding to any points of dispute that are raised by a debtor after they have been served. You will receive pragmatic and pro-active advice at all stages.

Start to instruct us now so that we can undertake an initial assessment of your case to decide whether it would be appropriate for you to serve a Statutory Demand in these circumstances