{"id":16214,"date":"2023-08-04T04:20:14","date_gmt":"2023-08-04T04:20:14","guid":{"rendered":"https:\/\/www.theukrules.co.uk\/?page_id=16214"},"modified":"2023-09-07T07:06:47","modified_gmt":"2023-09-07T07:06:47","slug":"statutory-demands","status":"publish","type":"page","link":"https:\/\/www.theukrules.co.uk\/rules\/employment\/taxation\/court-claims\/statutory-demands\/","title":{"rendered":"How to Make and Serve a Statutory Demand for Debt Payment"},"content":{"rendered":"
Upon receiving a statutory demand, the debtor (e.g. an individual or a company) has twenty one (21) days to (either):<\/p>\n
You can make an application to bankrupt the debtor (or ‘wind up’ the company) if they fail to respond within twenty one days.<\/p>\n
Note<\/strong>: There may be other options available if you are owed money<\/a> to get a small debt paid more quickly than making a statutory demand. But, you may need to get legal advice<\/a> about recovering a debt that is more than six (6) years old.<\/p>\n <\/p>\n <\/p>\n After choosing the appropriate form, you will need to fill it in and then ‘serve’ it (deliver) to the person or to the organisation that owes you money. There is no legal requirement to send a separate letter to them.<\/p>\n <\/p>\n You need to send a separate form for each partner if the debtor is someone in a business partnership. But, when serving a demand on an individual, the form you need will depend on the way that the debt is being collected. Thus, you should use:<\/p>\n Important<\/strong>: You need to use a different creditors form (e.g. Form 1 – Statutory Demand<\/a>) to make and serve a statutory demand in Scotland.<\/p>\n<\/div>\n Creditors must use Form SD1<\/a> (a ‘statutory demand’) to demand the immediate payment of a debt from a limited company (e.g. within twenty one days).<\/p>\n <\/p>\n <\/p>\n There are several ways of serving statutory demand forms listed above and found on the GOV.UK website, such as:<\/p>\n You will need to provide some information from your records if the demand is ignored. If the debtor fails to pay the debt within the twenty one day deadline, or they won’t agree to the statutory demand, you can (either):<\/p>\n The time limit for applying to bankrupt individuals, or winding up companies, is four (4) months. You would need to provide a reasonable explanation to the court named on the statutory demand if yours is late.<\/p>\n<\/p><\/div>\n<\/div>\n Besides keeping a copy of the statutory demand that you served, you will also need to keep copies of anything that confirms:<\/p>\n You can serve a statutory demand from another country (e.g. overseas of the United Kingdom). Even so, it would need to follow the local laws abroad as well as the UK rules and regulations<\/a> as set out in law.<\/p>\n Note<\/strong>: You can send a statutory demand by registered post or you can put it through a letterbox if you cannot deliver it in person.<\/p>\n<\/p><\/div>\n<\/div>\n <\/p>\n <\/p>\n What if someone sends you a statutory demand and you do not agree with it? If so, you can apply to challenge it and have it canceled (set aside). But, ignoring it can result in you being made bankrupt<\/a> (or your company being wound up).<\/p>\n You can make a challenge by applying to the court that has been named on the statutory demand (usually one of the nearby county courts<\/a>).<\/p>\n As a rule, the court will then suspend any bankruptcy petitions that a creditor filed against you – until they make a final decision. Nonetheless, they do not usually set aside statutory demands served after another court passes a judgment, such as when:<\/p>\n Note<\/strong>: It is not possible to challenge a statutory demand served on a company. Instead, follow the guidelines for responding to a statutory demand<\/a> (e.g. to stop a creditor winding up the company).<\/p>\n<\/p><\/div>\n Use Form IAA<\/a> to apply to challenge a statutory demand. You should make the application no later than (either):<\/p>\n You can use the next available day if the deadline falls on a weekend or one of the UK bank holidays<\/a>. The court may also grant you an extension for certain circumstances.<\/p>\n In most cases, the court will contact you within ten (10) working days of making the application. But, they can also give the creditor permission to issue a bankruptcy petition against the debtor (e.g. if they don’t agree with the application notice).<\/p>\n The court will pass the case over to a bankruptcy registrar if they agree with the application. Following that, they will review the case and arrange for a hearing.<\/p>\n<\/p><\/div>\n<\/div>\n <\/p>\n <\/p>\n Both parties will have an opportunity to present their case to either a registrar or a court judge. Then, they will make a decision (or request further evidence). As a rule, you get their decision once the final hearing has taken place.<\/p>\n The court will ‘set aside’ the statutory demand if you win the case, and they will suspend the deadline for paying the debt.<\/p>\n But, if you lose, you will have twenty one (21) days to pay back the money that you owe. Failing to pay means the creditor can apply to make you bankrupt (if the debt is at least \u00a35,000).<\/p>\n<\/p><\/div>\n The Insolvency Enquiry Line can give further information about how to deliver and challenge a statutory demand in the United Kingdom.<\/p>\n Insolvency Enquiry Line<\/strong> Important<\/strong>: You should not attend the court if you have symptoms of coronavirus (COVID-19)<\/a>, self-isolating, or you are in quarantine. Instead, notify the court that you will be unable to make the attendance.<\/p>\n<\/div>\n <\/p>\n <\/p>\n <\/p>\n Note<\/strong>: The main section contains information about making court claims<\/a>, debt recoveries, and registering for insolvency or bankruptcy.<\/p>\n<\/div>\n <\/p>\n <\/p>\n
\nForms for Serving Statutory Demands<\/h2>\n
Individuals (including business partnerships)<\/h4>\n
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Serving a Demand on a Limited Company<\/h4>\n
\nHow to Serve a Statutory Demand<\/h5>\n
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What if a Debtor Ignores a Statutory Demand?<\/h5>\n
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Records that You Need to Keep<\/h5>\n
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Serving a Statutory Demand from Abroad<\/h5>\n
\nHow to Challenge a Statutory Demand<\/h5>\n
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Deadlines for Challenging Statutory Demands<\/h5>\n
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\nProcedures at the Hearing<\/h5>\n
Contacting the Insolvency Service<\/h5>\n
\n Email: insolvency.enquiryline@insolvency.gov.uk<\/a>
\n Telephone: 0300 678 0015<\/a>
\n Monday to Thursday: 9am to 5pm
\n Friday: 9am to 3pm
\n Find out about phone call charges<\/a><\/p>\n<\/p><\/div>\n<\/div>\n
\nRelated Help Guides<\/h4>\n
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