Lawyers for Challenging a Statutory Demand

A Statutory Demand is a formal legal notice from a creditor demanding payment of a debt. For companies, the debt must be at least £750. For individuals, the minimum threshold is £5,000. If the debt is not paid, settled, or challenged within 21 days, the creditor may use it as a basis to begin insolvency proceedings, such as a winding-up petition for a company or a bankruptcy petition for an individual.

You may have been served with a Statutory Demand because the creditor believes the debt remains unpaid, and they are considering taking more serious legal action. It’s often used when previous attempts to recover the debt have not been successful. However, receiving a Statutory Demand does not automatically mean that the debt is final, enforceable, or even accurate.

It’s important to respond swiftly. You usually have only 18 days from the date of service to apply to the court to set aside the Statutory Demand. If you miss this deadline, your options may become more limited, and the creditor may proceed with insolvency action.

Not every Statutory Demand is valid. If you have received one, you may be able to apply to the court to have it set aside, but you must act within 18 days of receiving it. The court will only grant your application if there is a proper legal reason to do so. Common grounds for Challenging a Statutory Demand include:

• There is a real disagreement over whether the debt is owed or how much is due
• You are owed money by the creditor that matches or exceeds the amount they’re claiming
• The creditor has secured assets that cover the value of the debt
• The paperwork contains errors or was not properly delivered
• The debt is already being managed through a formal repayment plan or insolvency arrangement

Every case is different, and the grounds for Challenging a Statutory Demand depend on the specific facts of your situation. If you’re unsure whether you have a defence, our solicitors can quickly review the demand and advise on whether an application to set it aside is likely to succeed.

If you ignore a Statutory Demand and do not respond within the specified timeframe, the creditor may take the next step and issue insolvency proceedings. For individuals, this means applying to the court for a bankruptcy order. For companies, it could lead to a winding-up petition and the forced closure of the business.

At that stage, the process becomes far more serious and difficult to defend. Your assets, income or business operations may be at immediate risk, and you could lose control over how the matter is resolved.

Courts expect prompt action, so even if you believe the demand is incorrect or unjust, doing nothing is never advisable. Taking early legal advice gives you the best chance to resolve the matter before it escalates and may prevent insolvency altogether.

You usually have only 18 days from the date of service to apply to the court to have a Statutory Demand set aside. If you miss this deadline, the creditor may proceed with bankruptcy or winding-up action, so acting quickly is essential.

Once instructed, we would typically prepare your application within a few days. This includes reviewing your case, drafting the necessary documents, and submitting the application to court. The court will usually list the application within a few days, although the actual hearing date may take several weeks—or in some cases, a few months—depending on court availability.

During this period, we can continue negotiating with the creditor to try to resolve the issue without a formal hearing.