What is a Statutory Demand?
A Statutory Demand (Demand) is a document which gives a person 21 days warning to pay a debt. At the end of the 21 days the Demand can followed up with a bankruptcy petition. In 99% of cases following the issue of a statutory demand a bankruptcy petition NEVER is issued. Statutory demands are so successful because the average Debtor is so scared by what may follow that they pay within the 21 days.
Further, many creditors use various internet websites to let the banks, credit reference agencies and other public interest groups publicise the statutory demand. Therefore, this can be a disastrous consequence for most people.
A Statutory Demand is the first step to bankruptcy against any individual. These are prepared and served without court involvement and can be served as soon as the debt comes payable and judgment is not necessary. If the Debtor disputes the claim, they can apply for the demand to be set-aside. The bankruptcy court will stay the bankruptcy if there is a dispute. If the statutory demand is set-aside, the process can result in an order for costs being made against the Creditor.
Why issue a Statutory Demand?
The procedure is simple and all you need to do is complete a short form.
There is no need for personal delivery.
You do not need a legal representative
There are no fees to issue a Statutory Demand.
99% pay before any further petition is required
When is a Statutory Demand a threat?
If your debts are over £750.00.
- If the Creditor can afford to carry out the bankruptcy petition and will do so.
If you are a home owner or have valuable assets and the creditor knows this.
If your reputation is at risk, should the demand be made public.
For more information on:
- How to reduce the risk of bankruptcy should a demand be issued.
- How to set aside a Statutory Demand
- Any application to set-aside must be made with 18 days of the statutory demand being served.