A statutory demand is a kind of written warning from a creditor. It will state that if the debtor does not pay the debt or come to another arrangement that's acceptable to the creditor, they may start court proceedings seeking to bankrupt (Scotland – Sequestrate) your estate.
The debtor must repay the debt in full or come to some other arrangement within 21 days of the demand being served unless the demand is cancelled or set aside. The demand served must be in the prescribed style.
In England a debtor can apply to the court to 'set aside' (dismiss) the demand, this must be done within 18 days of the date the statutory demand was served.
Service on an individual must always be personal, whereas on another entity it could be their place of business or registered office. Ordinarily a statutory demand is served by process servers (England/Wales) or Sheriff Officers Scotland.
If the debt is below or falls below the statutory limit, you are unable to proceed with insolvency proceedings:
- Individual £5,000
- Other £750
- Individual £3,000
- Other £750*
* £1,500 to proceed to petition to wind up.
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