For creditors: serving a statutory demand that stands up
A statutory demand is the right tool when the debt is clear and not genuinely disputed. Against a company the debt must be at least £750. Against an individual, a bankruptcy petition can only follow if the debt is at least £5,000.
- We check the debt and your evidence before anything is served.
- We prepare the demand in the prescribed form and serve it correctly, keeping proof of service.
- If a company does not pay, secure or settle the debt within 21 days, it is treated as unable to pay its debts under section 123 of the Insolvency Act 1986, and a winding-up petition can follow.
Serving a demand for a debt that is genuinely disputed is risky. The court can restrain any petition and order the creditor to pay the other side's costs. That is why we review the position before a demand is issued.
Served with a statutory demand?
Act immediately. What you can do depends on who received it:
- A company: there is no formal application to set aside a demand served on a company. If the debt is genuinely disputed on substantial grounds, or the company has a cross-claim, we write to the creditor and, if needed, apply for an injunction to stop a winding-up petition being presented or advertised.
- An individual, including a director served personally: you can apply to the court to set the demand aside, usually within 18 days of service. Grounds include a genuine dispute, a counterclaim or set-off, or security held by the creditor.
Ignoring a demand is the worst option. A petition can follow within weeks, and once a winding-up petition is advertised, banks commonly freeze the company's accounts.
Common questions
What is the minimum debt for a statutory demand?
£750 for a demand against a company. For an individual, a bankruptcy petition requires a debt of at least £5,000.
Can a statutory demand be served if the company disputes the debt?
It can be served, but if the dispute is genuine and substantial, any petition will usually be restrained and the creditor may have to pay the company's costs.
What happens after 21 days?
If a company has not paid or reached terms, the creditor can present a winding-up petition. For an individual, a bankruptcy petition can follow.
Received a statutory demand, or need to serve one? Request a call back using the form. If a deadline is close, call 0800 037 1305 now (international callers +44 1482 616 616).
