What is a Statutory Demand?
If your customer meets the criteria and they have failed to pay your invoices as and when they fell due, you can serve a statutory demand to ask for payment of a debt from either the individual or company.
Statutory Demands….. What are they?
A statutory demand is a document that can be served on either an individual (also including a sole trader or non limited company) and a Limited company, subject to your debt meeting the following criteria:-
Individuals ( including sole traders and non limited companies)
• The undisputed debt amount must be £5000 or greater
• The undisputed debt must be £750 or greater
You should not serve a statutory demand is the debt is over 6 years old and no payment or admission of liability has been made by your customer within this period of time.
If your customer meets the above criteria and they have failed to pay your invoices as and when they fell due, you can serve a statutory demand to ask for payment of a debt from either the individual or company.
Anyone who’s owed money (the ‘creditor’) can serve a statutory demand. You do not require a solicitor to do this.
When the individual or company that owes you money (the ‘customer’) receives a statutory demand, they have 21 days to prove they are solvent by either:-
• Paying the debt
• Reaching an acceptable agreement to repay the debt
You could then apply to Bankrupt your customer, or close (‘Wind Up’) their company if they do not respond to the statutory demand within 21 days. You would have 4 months to do this from when the 21 days expires.
Can a Statutory Demand be issued if the debt is disputed?
You should not consider a statutory demand if you are aware there is a dispute and the undisputed sum is less than £750 for limited companies and less than £5000 for individuals (including sole traders and non limited companies)
If you issue a demand and a dispute comes to light later, then what happens depends on whether your debt is with a Limited Company or not. If it is, you will be expected to agree that you would agree not to proceed with enforcing the statutory demand by proceeding to the next stage, which would be either a Bankruptcy or Winding Up petition.
If the debt is to an individual or a non-Limited Company, the customer would be able to request a court hearing, where a Judge will decide whether it is a valid dispute or not ( application to request hearing to set aside the demand) If this was to happen, we would always recommend to attempt to and withdraw the statutory demand on the basis of no costs to either side. However this is not always possible, a hearing to hear the customers application to set aside the demand may subsequently follow.
In either case, you can always continue with County Court proceedings at a later date even if there is a valid dispute and even if the demand is withdrawn.
How do I get my statutory demand issued?
You can get in touch via the website http://www.danielssilverman.co.uk/contact and us our web chat function or call the office directly to speak to one of our friendly team 0151 7076061, we’d be happy to answer any questions you may have about how we can help you.