I have received a Statutory Demand, what should I do?
It can be daunting to receive a Statutory Demand, whether it is in the post or in person from a process server, especially in the current circumstances where people are particularly concerned about finances and where their business might be headed.
Many debtors feel that now is the time to call in the sums which they believe are due and owing to them and therefore we are likely to see an increase in the amount of Statutory Demands being served, either on individuals or businesses.
If you receive a Statutory Demand, you should make sure that you take action and seek legal advice, particularly if you dispute the debt. A Statutory Demand is a written demand for payment and should only be served where there is no dispute as to the funds owed and the person/company owing them. It can be considered to be an abuse of process if a demand is served in relation to a sum which the debtor is aware is disputed.
Demands can be served on individuals or on companies. It is the first step in the process by the debtor to recover funds which they state are owing and often results in either a bankruptcy petition being issued against an individual, or a winding up petition being presented to a company.
If you receive a demand for payment personally (i.e. not for a company debt) then you should ensure that the demand was properly served, that the sum being claimed is in excess of £5,000 and that the claimed debt is no older than 6 years. If you have concerns about any of the above criteria, the demand may not be valid.
If a demand was served on a company, you should also check that the demand was properly served, that the debt is no older than 6 years and that the sum being claimed is in excess of £750.
If you do not agree that you or the company owe the sums being claimed, you have 21 days within which to seek to set aside the Statutory Demand. This requires an application to be made to the Court to set it aside. As this is time sensitive you should seek advice if you do not agree with the debt.
If you do not respond to the Statutory Demand, and do not pay the sum being demanded, the debtor has 4 months within which to apply to make you bankrupt or to wind up the company.
Time is of the essence when you receive a Statutory Demand and therefore you should act quickly and contact your solicitors who can help you. We can advise whether you ought to apply to set aside the Statutory Demand and can draft the application for you.
Please do not hesitate in contacting our Insolvency team or Caoimhe Boyce directly on cboyce@meaby.co.uk should you have concerns about a debt which is being pursued against you or if you believe you are owed monies.
