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Dealing with Statutory Demands

What is a Statutory Demand?

A Statutory Demand is a formal demand for payment served by a creditor on someone who owes them money – for an individual the debt must be at least £5,000. For a company it is a minimum of £750. A Statutory Demand should only be served if the debt is undisputed, but creditors often attempt to use it as a way of collecting their debts generally.

What is the effect of a Statutory Demand?

If you ignore a Statutory Demand, it can ultimately lead to your bankruptcy or your company being wound up by a Court. If you do not formally dispute it or pay the debt within 18 days of service on you, it will be presumed that you are unable to pay your debts and are therefore insolvent. Once 21 days have passed after the demand has been served, the creditor can petition for your bankruptcy or wind up your company.

How do I challenge a Statutory Demand?

The main basis on which a Statutory Demand against an individual is set aside is if it is disputed. This could be on a number of grounds e.g. you do not owe the creditor the monies they claim, they actually owe you money, you’ve already reached an agreement with them, the Statutory Demand was issued in error or there are procedural requirements that have not been complied with. The application to challenge the Statutory Demand should be made within 18 days of service of the demand and will then be considered by a Judge who may or may not list the matter for a hearing.

If your company has received a Statutory Demand that you dispute, other avenues of relief may be available to you. It is important to seek legal advice to review your options.


If you or your company have been served with a Statutory Demand or somebody owes you an undisputed debt, please contact Mark Rostron or Kate Heaney in our Insolvency team on 029 2082 9100 for a free initial consultation.


To speak to one of our experts today, please contact us on 02920 829 100 or by using our Contact Us form for a free initial chat to see how we can help.

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