Statutory demand disputed debt

Statutory demand individual - disputed debt

In circumstances of statutory demand individual, a creditor cannot issue a bankruptcy petition based on the statutory demand if the debt is disputed on substantial grounds or the debtor has a counterclaim or set-off that would reduce the debt to less than £5,000 (being the new limit for bankruptcy petitions to be issued).

Statutory demand company - disputed debt

In respect of a company, if the company has a valid reason for not paying the debt, then a winding up petition should not be presented. A valid reason may arise where either:

  1. The debt is genuinely disputed on substantial grounds or
  2. The company has a genuine cross claim against the debtor.

In terms of what constitutes substantial grounds this effectively means the dispute must be real as opposed to simply “frivolous”. A mere honest belief that payment is not due is not sufficient to oppose the statutory demand.

If only part of the debt is disputed and the company fails to pay the undisputed element, then it is possible to issue a winding up petition for that undisputed amount which has not been paid. It can be used as evidence that the company is unable to pay its debts as and when they fall due.

Contact an expert statutory demand solicitor now

Francis Wilks & Jones is the county’s leading firm of statutory demand solicitors. We are genuine experts in what we do with a combined experience of over 100 years in statutory demand claims. Our knowledge of the relevant legislation combined with our day to day experience and team of experts makes us the No 1 choice for people or companies in need of advice.


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