This article is the first in a short series of articles concerning statutory demands and personal insolvency.
Help! I’m owed money!
In the current financial climate creditors pursuing debtors for money are increasingly keen for outstanding balances to be paid in a timely fashion. Where debts remain unpaid, some see the insolvency process (personal or otherwise) as a viable (and quicker) alternative to issuing a money claim in the County Court.
Statutory demand: What is it?
If wishing to apply the pressure of bankruptcy to an individual, a creditor will typically first serve the debtor with a statutory demand. A statutory demand is a written demand for payment of a debt. It does not commence court proceedings (and indeed there is no obligation on a creditor who is served the statutory demand to commence insolvency proceedings against the debtor) and it does not need to be issued at court or a fee paid.
The process has potential advantages:
- It does not involve the costs of involving the courts from the outset of the matter.
- Preparing and serving a statutory demand is comparatively quick and inexpensive.
- The service of a statutory demand can either result in the prompt payment of a debt or allow the parties to quickly get to the bottom of the details of any dispute or counterclaim.
Statutory demands are often used as a precursor to the commencement by the creditor of bankruptcy proceedings against the debtor. So long as certain criteria are satisfied, following the expiry of a statutory demand period a creditor can then seek to issue bankruptcy proceedings against the debtor.
If you have received a statutory demand or in the event that you would like to discuss the possibility of serving a statutory demand on a debtor, please call our litigation solicitors on 0800 988 7756.