Creditor has sent a statutory demand - bankruptcy

Summary

A statutory demand is a kind of written warning from a creditor. It will state that if you don't pay your debt or come to another arrangement that's acceptable to the creditor, they may start court proceedings to make you bankrupt. If you don't repay the debt in full or come to some other arrangement within 21 days of the demand being served on you, your creditor can apply to make you bankrupt, unless the demand is cancelled or set aside. You have several options if you receive a statutory demand. The most important thing is not to ignore it if you don't want to become bankrupt. If you ignore a statutory demand, the chances are that your creditor(s) will then apply to make you bankrupt. You should get advice about how bankruptcy would affect you. It may be the best option for dealing with your debt situation. You can talk to an adviser. There are certain time limits creditors have to keep to when taking court action for debt. If the time limit has run out, the debt is called statute barred and the creditor isn't allowed to take court action to get you to pay. You should check whether the time limit has run out, and make sure you don't do anything to inadvertently re-start the time.

Key information

• How to apply to have a statutory demand set aside
• What to do if a creditor is trying to make you bankrupt
• How to apply to have a statutory demand cancelled
• Bankruptcy - what you need to know
• More about individual voluntary arrangements
• A statutory demand is a kind of written warning from a creditor. It will state that if you don't pay your debt or come to another arrangement that's acceptable to the creditor, they may start court proceedings to make you bankrupt.
• If you don't repay the debt in full or come to some other arrangement within 21 days of the demand being served on you, your creditor can apply to make you bankrupt, unless the demand is cancelled or set aside.
• You have several options if you receive a statutory demand. The most important thing is not to ignore it if you don't want to become bankrupt. If you ignore a statutory demand, the chances are that your creditor(s) will then apply to make you bankrupt.
• You should get advice about how bankruptcy would affect you. It may be the best option for dealing with your debt situation. You can talk to an adviser.
• There are certain time limits creditors have to keep to when taking court action for debt. If the time limit has run out, the debt is called statute barred and the creditor isn't allowed to take court action to get you to pay. You should check whether the time limit has run out, and make sure you don't do anything to inadvertently re-start the time limit.
• If you think the statutory demand can be challenged, for example because you don't owe the money or the creditor is out of time for taking court action, you can apply to the court to have the statutory demand cancelled, as long as you do so within 18 days of it being served. This is called being set aside. If the court agrees to set aside the statutory demand, it will be cancelled and your creditor may not be able to carry on trying to make you bankrupt. This depends on the reason why it is set aside.
• Some of the grounds for getting a statutory demand set aside are very technical, so it's really important to get advice about whether you have grounds to make a challenge.

Practical guidance

• Source: Creditor has sent a statutory demand - bankruptcy

Related topics

More in this area

• Check if a financial service has followed the rules
• Check if you have to pay a debt
• Check the rules after you go bankrupt
• Check what an IVA is
• Cold called by a debt management plan provider