Statutory demand defence

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If you have received a Statutory Demand then that can be very worrying. Statutory demands are being used much more frequently to put more pressure on to pay and require urgent action in order to be properly dealt with. They are being used a lot by HMRC at the moment too.

Important time limits

Dealing with the statutory demand within the right time limits is crucial

• It is made very clear on the statutory demand the requirement that where there is a dispute, this must be raised within 18 days of the statutory demand reaching the notice of the recipient. Importantly, a statutory demand should not be used where there is any dispute to the debt. This is often used inappropriately
• It is also made clear that where there is no dispute, payment must be made within 21 days.

Failure to act risks a bankruptcy petition being presented which has serious consequences.

How to defend a statutory demand

Common complaints about statutory demands;

• Obvious errors in the wording in the body of the form
• The amount claimed is wrong or inaccurate
• It wasn’t served properly
• The court in which an application to set aside should be made has been left blank

None of the above are on their own sufficient to set aside a statutory demand but may be a sign that something is wrong.

The defence must be a genuine and substantial dispute to the majority of the claim.  Usually that means that there have already been communications where the dispute has been raised and there have been no admissions of a debt or a default in a payment plan.

Strategy is important

Where there is a clear dispute there are often choices of strategy which may avoid expensive litigation.

• At FWJ we recognise that applications to court are expensive and risky, so often early engagement with the claimant is effective where equally the same risks and costs apply to them where there is an obvious dispute.
• We regularly resolve disputes arising out of statutory demands early and without court proceedings being issued.

Remember

A statutory demand against a limited company puts the company at serious risk of a winding up petition being presented after 21 days if payment is not received.

Legal advice should be sought urgently as different rules apply.

You can expect a hands on easy to understand approach from FWJ

We would always recommend taking legal advice as soon as possible after receiving a statutory demand.

Failure to do so risks serious consequences.  Time runs out quickly when you are up against it trying to raise funds or remortgage or are waiting to be paid yourself and much can be done to manage that process to avoid more expensive costs later.

If instructed early enough, we can secure for you the time needed to manage the claim or make an application to set the demand aside.

We needed expert bankruptcy advice and we definitely found it in the bankruptcy team at FWJ. Sue and Bradley provided us with clear and understandable advice in a situation which was really stressful for us. They were able to resolve matters on very favourable terms for us and we can’t thank them enough.

A client for whom we achieved a successful outcome