Getting the details of the debt properly set out in the statutory demand is vital - otherwise the demand could be thrown out by the court. Our team can help explain how best to do this.
Personal insolvency – statutory demand individual
For a statutory demand against an individual, the statutory demand must
- make it clear what the amount of the statutory demand debt is;
- the consideration (basis) for the debt (or if there is no consideration, the way in which it arises);
- the details of any judgment or order and if the statutory demand debt is payable in the future;
- grounds upon which it is alleged that the debtor appears to have no reasonable prospect of paying that debt.
Pursuant to rule 10.1(7) of the Insolvency Rules 2016 (below), a statutory demand may include interest and other charges accruing from time to time. However, if the demand is for an immediate payment of sums of money, only those sums due at the date of the demand by way of interest can be claimed.
If interest is claimed at a different rate that rate must be separately identified on the statutory demand. It must also state the grounds upon which the amounts are due and payable.
Corporate insolvency – statutory demand company
With a statutory demand company, the statutory demand must state
- the amount due and owing on it;
- the amount claimed can include VAT and interest that has accrued before the date of the statutory demand;
- it cannot include any interest which falls due in the future or any other amounts which the company may be due to pay in the future.
As with statutory demand for individuals, the company statutory demand must separately identify interest if it is charged at a different rate and/or any other charges sought.
The relevant court rules and requirements are set out below
6.1 of the Insolvency Act 1986
(3) The demand must state the amount of the debt, and the consideration for it (or, if there is no consideration, the way in which it arises) and—
(a) if made under section 268(1) and founded on a judgment or order of a court, it must give details of the judgment or order, and
(b) if made under section 268(2), it must state the grounds on which it is alleged that the debtor appears to have no reasonable prospect of paying the debt.
Francis Wilks & Jones is the county’s leading firm of statutory demand solicitors. Whatever your statutory demand enquiry, let us help you.