What is a Statutory Demand?

9 May 2008

A statutory demand is a demand for payment of a debt over £750. It’s also a warning that your creditor may start bankruptcy proceedings against you if you don’t pay within 21 days. A creditor does not need to get the court involved to serve a statutory demand.

It’s worth noting that no-one can push for bankruptcy unless you owe them £750 or more. So if you receive a statutory demand, you could consider paying enough of the debt to bring the total under that minimum. This isn’t the best way of managing your debt – and you’ll still need to deal with the remaining debt – but at least you’ll no longer face the immediate threat of bankruptcy.

Dealing with a statutory demand
If you receive a statutory demand, you can:

• Pay the full amount immediately
• Make a ‘reasonable offer’ – see if your creditor will write off the rest of the debt if you pay a substantial percentage of it
• Offer to pay the amount in instalments
• Apply to the County Court to have the statutory demand ‘set aside’

Setting aside a statutory demand
You can apply to have the statutory demand set aside if:

• You have a ‘counter claim’ (the creditor owes you money)
• The amount in question is less than £750
• You dispute that you owe the money
• The creditor is holding something of yours as security – something which is worth as much as or more than the amount mentioned in the statutory demand.

If you decide to apply to have the statutory demand set aside, you’ll have 18 days to do so. You’ll need forms 6.4 and 6.5 from the County Court.

Back to debt management blog home