“I dispute the debt claimed and I don't believe they are entitled to be paid ! So how can I defend a Statutory Demand ?”

BACK TO FAQs

A Statutory Demand should only be issued in respect of an undisputed debt, if you dispute the debt and your are an individual you can apply to the Court to have the demand Set a Side, if you're a company it is more complex, but importantly you must contact the other-side or creditor and formally advise them of the grounds for the dispute and request the demand be withdrawn.

When you receive a Statutory Demand, it’s important to seek expert legal advice straight away as there are a number of actions you can take to stop a demand becoming a Winding Up Order (in the case of a Company) or Bankruptcy Order (in the case of an individual)

A Statutory Demand issued to an Individual

You only have 18 days from the receipt of a Statutory Demand to make an application to court to Set a Side a Statutory Demand. The process is not expensive and involves submitting an application backed up by a statement of fact and a witness statement and attending court to argue your case. If the court agree that the debt can be questioned say as a result of goods and services not being of sufficient quality then they will set a side the Statutory Demand and if the creditor has abused the process when they clearly knew there was a dispute then your costs will be awarded against them.

Top Tip:

The cost of making an application to Set a Side a Statutory Demand is very small, and 4R would recommend that it is well worth the small investment to secure control of the situation. 4R will advise you of the merits and strength of your case as part of our free consultation, then we will either get the other side to withdraw the Statutory Demand or make the application to the court for you. Remember issuing a winding up or bankruptcy petition is very expensive so creditors will normally issue a winding up petition if they are convinced there is not a dispute.

If a creditor is simply ignoring the grounds of your dispute and using the Winding Up Process to bully you into paying up then they will normally withdraw the Statutory Demand when advised you intend to seek to Set a Side the demand and will rely on a more normal debt recovery processes such as dispute resolution out of court or a County Court Summons to allow the court to decide on the merits of any dispute.

If you do not Set a Side the Statutory Demand then after 21 days the creditor has the legal right to issue a Winding Up Petition in the case of a Company or Bankruptcy Petition in the case of an Individual.

The court tend to take the view that if you have failed to seek the remedy of a Set A Side in time that an individual has tacitly acknowledged the debt and it is therefore dangerous to rely on defending the claim at the court hearing to determine if an individual should be made bankrupt. Not withstanding this the courts are generally reluctant to make an individual bankrupt at a first hearing, and only allow 10 mins to hear the petition. If there is a dispute the court is more likely to adjourn the hearing to give the parties an opportunity to reach an agreement by consent or to hear the substantive issues at a full hearing.

A Statutory Demand issued to a Company

This is more complex as a Company does not have the same right to seek A Set a Side Hearing. Legal remedies are available including injunctive action and the threat of seeking damages. However if a clear commercial dispute exists the other side have a duty of care to respond and enter into a dispute resolution service. The next step of issuing a winding up petition is both expensive and serious and any spurious claims or unresolved disputes are going to be looked at by the courts and damages and cost awarded if the other side have abused the process.

Top Tip:

The cost of making an application to Set a Side a Statutory Demand is very small, and 4R would recommend that it is well worth the small investment to secure control of the situation. 4R will advise you of the merits and strength of your case as part of our free consultation, then we will either get the other side to withdraw the Statutory Demand or make the application to the court for you. Remember issuing a winding up or bankruptcy petition is very expensive so creditors normally will normally issue a winding up petition if they are convinced there is not a dispute.

If in doubt, call us on 0800 902 0123 for advice. It’s free

Whatever your circumstances are 4R Business Recovery can and will be able to help you. Simply get in touch with an expert today on 0800 902 0123 to get free advice that will help you cancel out the stress of dealing with any issues you may be facing.

SHARE

FAQs

Free Guides

Download our free information pack for a detailed guide to Creditor Pressure.

Case Studies

Our case studies demonstrate real life examples of the work we have done for our clients over the years.

What Our Clients Say

"The advice we received from 4R was second to none, there was always someone at the end of the phone, and to have someone like 4R to advise was very important to me. They gave us a second chance."

Rachael
School Furniture Manufacturer

"4R advice and guidance worked perfectly for us, and I would recommend 4R Business Recovery to any other business owners confronting business debt problems"

Ian Roberts
Office Fit Out Supplier

Get the Help You Deserve

0800 90 20 123

Urgent Help Call 24/7

020 7183 2606

We'll Call You

Request a Callback