What is a Statutory Demand?
Statutory Demands are one of the most useful tools in recovering debt. A Statutory Demand is a formal, legal demand of payment being fulfilled within 21 days of the demand being served. They are also a warning of consequential action if the debt is ignored. Consequences such as legal action, the winding up of a company or even bankruptcy generally ensure swift payment of the debt in over 80% of cases. It also informs the debtor of their right to dispute the demand, and who to pursue if they wish to do so.
I am owed money, Is a Statutory Demand suitable for my needs?
– Due to the Statutory Demand having the option of dispute, they can only be used to resolve previously undisputed debts.
– A statutory demand comes at a serving cost, so they are suitable for debts over £750, but more realistically suited to debts over £2000 to ensure financial benefit.
– Statutory Demands apply only to England and Wales as Scotland practise different legal procedures.
“Yes, they owed me over ten grand. They paid up though, after a Statutory Demand”
Ensure the Statutory Demand is personally delivered, preferably by an experienced Legal Process Server (such as Jack Russell!) to avoid any potential problems later down the line.
What do I do if I’ve received a Statutory Demand?
– If you have received a Statutory Demand, you have 21 days (or 28 if you live abroad) to satisfy the demand. – The demand can either be paid in full or an agreement can be put in place if you wish to pay in instalments.
– If you wish to dispute the Demand, you have 18 days (or 22 if you live abroad) to do so.
DO NOT ignore it. Ignored Demands can have serious financial consequences to you or your company’s financial health.