In brief, a statutory demand is a requirement made by a creditor for payment of an overdue debt against either a company or an individual. In order for a demand of this type to be made the debt must exceed £750 if owed by a company, or £5,000 if by an individual. The demand itself comes with a warning of further action if the debt is not settled within 21 days from its date.
What happens if you receive a statutory demand?
You have several options if you receive a statutory demand but ignoring it is not one of them. If you ignore it, there is a significant chance that the next piece of correspondence received will be a winding-up or bankruptcy petition. At that stage, you will face potentially insurmountable problems and could face bankruptcy or liquidation of the company. Should you receive a Statutory Demand for a debt that is either genuinely subject to dispute or for an amount less than the de-minimus levels (above) then you can apply to have it “set aside” as long as this is done within 18 days of its date. The overriding principle is that if you cannot pay the debt in full within the 21-day time limit and there are no disputes then whilst it may be prudent to firstly of all try to negotiate a payment plan with the creditor, this should be done immediately and must be resolved within the 21 day period or you are at risk.
Contact The Insolvency Experts for support
If you are not able to reach a suitable compromise then you should seek further assistance from The Insolvency Experts who have significant expertise in dealing with situations of this type. We can offer advice and support for dealing with statutory demands. You can contact us online, or you can call us directly on 0300 303 8284.