HomeFWJ TakeawayStatutory demand assistanceDefending a statutory demandStatutory Demand Set Aside Guide [2024]

Being served with a statutory demand can be a stressful experience. At Francis Wilks & Jones, we understand the anxiety and uncertainty this can cause. Our dedicated statutory defence team has been helping individuals deal with these types of claim since 2002. We are here to provide you with the guidance, support, and expert legal advice you need to navigate this complex process with confidence and ease.

We specialise in helping individuals and businesses in England respond to statutory demands effectively, using our extensive knowledge of the Insolvency Rules 2016 and practical experience in successfully setting aside statutory demands. Our client-focused approach ensures that you receive personalised attention and a tailored strategy to address your unique situation.

  • Choosing Francis Wilks & Jones means partnering with a firm that is committed to protecting your interests and achieving the best possible outcome for you.
  • Whether you have grounds to dispute the demand or need assistance in negotiating with creditors, our team is equipped with the skills and expertise to support you every step of the way.

Don’t face this challenging time alone. Let us be your trusted ally in helping you through your current situation.

Contact us today for a free consultation.

Absolutely excellent advice, service, professionalism and most importantly RESULTS! After failed attempts with previous solicitor, Douglas literally saved the day and was able to secure a win for us. Highly recommended

A client of the firm

What is a statutory demand and what does it mean for me?

A statutory demand is a formal written request for payment of a debt. It serves as a warning from the creditor that if the debt is not paid or settled within 21 days, they may start insolvency proceedings against you meaning a bankruptcy petition against an individual or a winding up petition against a company.

This can be distressing, but it’s important to understand that it’s the first step in a legal process, not an immediate consequence. Our team at FWJ can help you navigate this process and explore all available options to address the demand.

Why have I been served with a statutory demand?

You have been served with a statutory demand because a creditor believes you owe a debt that remains unpaid. This step is often taken when other methods of debt recovery have failed. It’s crucial to act quickly and seek professional advice to understand your position and potential defences. Our experienced team can help you assess the situation and develop a strategy to protect your interests.

What are the consequences of ignoring a statutory demand?

Ignoring a statutory demand can lead to severe consequences, including the creditor petitioning for your bankruptcy if you are an individual or issuing a winding up your company. This can have significant financial, personal and career implications. Prompt action is essential, and our firm can provide the guidance needed to respond effectively and mitigate these risks.

What is rule 10.4 of the Insolvency Rules 2016?

Rule 10.4 of the Insolvency Rules 2016 allows you to apply to the court to set aside a statutory demand if you have valid reasons, such as

  • a genuine dispute over the debt;
  • A valid cross claim; or
  • the creditor holding security exceeding the debt’s value.

Our knowledgeable lawyers can help you understand this rule and prepare a robust application to set aside the demand, ensuring your case is presented effectively.

How do I know if I have grounds to set aside the statutory demand?

Grounds to set aside a statutory demand include disputing the debt, having a counterclaim, or the creditor holding security over the debt. Additionally, if there are procedural errors in the demand, you may have a case. Our team can review your situation in detail and advise whether you have a strong basis for an application to set aside the demand.

How can I tell if the statutory demand is valid or has errors?

A statutory demand must meet specific legal requirements, including accurate details of the debt and correct service. Errors in these details or improper service can render the demand invalid. Our experts can scrutinise the demand for any deficiencies and help you challenge its validity if any errors are found.

What should I do immediately after being served with a statutory demand?

Upon receiving a statutory demand, act quickly. Review the document carefully and seek legal advice immediately. Contacting our firm will provide you with the professional support needed to understand your options and take the necessary steps to protect yourself from potential insolvency proceedings.

What evidence will I need to support my application to set aside the statutory demand?

To support your application, you’ll need evidence such as proof of payment, correspondence disputing the debt, or documentation showing a counterclaim. Detailed records and any relevant contracts or agreements will strengthen your case. Our legal team can help you gather and present this evidence effectively.

What evidence is required to prove that the debt is disputed?

Evidence that can prove a debt is disputed includes emails, letters, or other communications challenging the debt, documentation of payments made, and any agreements or contracts that contradict the creditor’s claims. Our firm can assist you in compiling and presenting this evidence to support your application to set aside the demand.

What is the process for applying to set aside a statutory demand?

The process involves completing an application form, submitting a supporting witness statement, and providing any necessary evidence. You must file these documents with the appropriate court. Our lawyers can guide you through each step, ensuring your application is thorough and timely.

Having legal expertise in this part of the process is vital. It can hugely increase your prospects of successfully setting aside the statutory demand.

How long do I have to apply to set aside the statutory demand?

You must apply to set aside a statutory demand within 18 days of being served. Acting quickly is essential to ensure your application is considered by the court within the correct time period. Failure to do so can lead to a bankruptcy petition being issued.

Our firm can help you meet this deadline and prepare a strong application.

What if the time limit for a statutory demand has passed?

If the 18-day time limit has passed, the creditor can potentially begin bankruptcy proceedings against you as an individual (or winding-up proceedings if it is a company). However, you may still have options to negotiate with the creditor or address the debt in other ways. Contact us immediately to explore all possible avenues and find the best solution.

How can a statutory demand be used against me?

A statutory demand can lead to insolvency proceedings if ignored or unresolved. This includes bankruptcy for individuals or winding-up orders for companies, which can have severe financial and personal consequences. Our firm can help you respond effectively and prevent these outcomes.

What if I am liable for the debt in the statutory demand?

Even if you are liable for the debt, there may be options to negotiate repayment terms or reach a settlement with the creditor.

Our legal team can help you explore these options and work towards a resolution that minimises the impact on your financial situation. We often advice clients on negotiated repayment terms or if there is no alternative, entering in to a form of insolvency like an Individual Voluntary Arrangement. We explore every option to avoid the possibility of a bankruptcy petition.

What is the application process to have a statutory demand set aside?

The application process involves completing the Insolvency Act application form, drafting a supporting witness statement, and gathering evidence to support your case. These documents are then filed with the court. Our experienced lawyers can guide you through this process, ensuring your application is well-prepared and timely.

Why could a statutory demand be set aside?

A statutory demand can be set aside if there is

  • a genuine dispute over the debt,
  • there is a valid cross claim
  • if there are procedural errors, or
  • if the creditor holds security exceeding the debt’s value.

Our team can help identify and argue these grounds effectively.

What is the right court for a statutory demand?

The appropriate court for a statutory demand application depends on the location of the debtor and the type of debtor (individual or company). Generally, applications are made to the county court or High Court. We can help you determine the correct venue and ensure your application is filed appropriately. It is vital to get this right as otherwise it could invalidate your set aside application.

How do I complete the Insolvency Act application form?

Completing the Insolvency Act application form requires detailed information about the debt, the grounds for setting aside the demand, and supporting evidence. Our lawyers can assist you in accurately completing the form and ensuring all necessary details are included.

How do I draft a witness statement in support of the application?

A witness statement should clearly outline the reasons for disputing the debt, provide relevant evidence, and detail any procedural errors in the demand. We can help you draft a compelling witness statement that effectively supports your case to set aside the statutory demand.

Will I have to attend a hearing?

Not always – but often it is better to be there in person to show the Judge that the application matters to you.

Statutory demand set aside applications are normally dealt with “on paper”, so the Judge will just review the written evidence and not need to hear oral evidence from the witnesses.

Our firm will prepare you for the hearing, ensuring you understand the process and are ready to present your case confidently. As part of this we will find a barrister for you who is specialised in this area of the law as they will need to present your case to the Judge on the day.

Andrew and Douglas provided outstanding service. Communication was incredibly supportive and clear. My case outcome was the very best it could have been. I cannot recommend them enough and will forever be grateful for all their hard work.

A client for whom we secured a successful outcome

What happens if my application to set aside the statutory demand is successful?

If your application is successful, the statutory demand will be set aside, and the creditor cannot proceed with a bankruptcy petition against you. This gives you relief from the immediate threat and allows you to address the debt through other means. One thing to remember is that the creditor might still bring a claim in the county court or High Court and if this happens – we can help guide you on this and next steps after a successful set aside application.

What happens if my application to set aside the statutory demand is unsuccessful?

If your application is unsuccessful, the creditor can proceed with a bankruptcy petition against you if the debt is over £5,000.

However, you may still have options to negotiate with the creditor or take other legal actions. We can help you explore these options and protect your interests.

What steps do I take after an application to set aside a statutory demand is dismissed?

If your application is dismissed, you should seek immediate legal advice to discuss your options, which may include negotiating a settlement with the creditor or exploring insolvency alternatives such as an IVA. Our firm can provide the guidance and support you need to navigate this challenging situation.

Can I negotiate with the creditor after being served with a statutory demand?

Yes, you can always negotiate with the creditor to settle the debt or agree on a repayment plan. Often, creditors are willing to negotiate to avoid the time and expense of a full court hearing – and the risk of a cost order against them if they lose the set aside application. Our lawyers can assist you in these negotiations to achieve the best possible outcome.

Will applying to set aside a statutory demand affect my credit rating?

Applying to set aside a statutory demand does not affect your credit rating. However, if the debt remains unresolved and leads to bankruptcy proceedings, it will almost certainly impact your credit. Our firm can help you manage the situation to minimise any potential negative effects on your credit.

How do I find a solicitor who can help with setting aside a statutory demand?

You have found the right one! We have a tack record of statutory demand work stretching back over 20 years. We are genuine experts in this area of the law.

Do I need a solicitor to apply to set aside a statutory demand?

While it is possible to apply without a solicitor, having professional legal assistance significantly increases your chances of success. We are not just saying this so that you “give us the work”, we are saying this based on our 20+ years’ experience.

And remember – the downsides of losing the application are significant – possibly leading to your bankruptcy. Whilst no one wants to spend money with lawyers if they don’t have to – investment now can pay huge dividends on your future life and career.

What are the potential costs involved in applying to set aside a statutory demand?

The costs normally consist of the court fee for issuing the application and solicitor fees for preparing the evidence, filing it at court and then doing any further work on the case.

Our firm offers transparent pricing and can provide an estimate based on your specific situation. We strive to offer cost-effective solutions to help you manage these expenses.

Can I recover the costs of applying to set aside a statutory demand if I am successful?

Yes, if your application is successful, you can request the court to order the creditor to pay your legal costs. Our lawyers can assist you in making this request and ensure that your case for cost recovery is well-presented.

What are the chances of successfully setting aside a statutory demand?

The chances depend on the specific circumstances of your case, including the validity of your grounds and the quality of your evidence. Our experienced team can assess your situation and provide a realistic evaluation of your chances, working diligently to maximise your likelihood of success. Our experience means that we maximise the chances of success for you.

Are there any alternatives to setting aside a statutory demand?

Alternatives include negotiating directly with the creditor for a repayment plan or settlement, or seeking debt advice and solutions such as Individual Voluntary Arrangements (IVAs) or bankruptcy. Our firm can help you explore these alternatives and determine the best course of action for your circumstances.

How can I prepare for the court hearing to set aside the statutory demand?

Preparation involves gathering all necessary evidence, organising your arguments clearly, and understanding the court procedures. We will guide you through this process, helping you prepare thoroughly to present a strong case at the hearing.

What should I expect during the court hearing?

During the hearing, both parties will present their arguments (often using a barrister), and the judge will ask questions to clarify the issues. It’s a formal process but conducted fairly. Our team will be there to support and represent you, ensuring you are well-prepared and confident.

Can I challenge a statutory demand on the basis of a dispute over the debt?

Absolutely. If you genuinely dispute the debt or have a counterclaim that equals or exceeds the amount demanded, you can challenge the statutory demand and this is often the basis of most set aside applications. Remember – in the insolvency courts, the threshold to show that the debt is disputed is low – and therefore we can take advantage of this.

Our lawyers can help you present a compelling case to the court, highlighting the grounds of your dispute and arguing that the creditor was wrong to commence statutory demand proceedings.

What if the debt is below the statutory threshold?

Technically there is no lower threshold on a statutory demand. What people confuse is the threshold for a bankruptcy petition which is £5,000 for individuals. In reality what this means is that where a statutory demand is served for a debt below £5,000, even if the creditor is successful at the set aside hearing, they still cannot proceed with a bankruptcy petition if the debt (including costs and interest) remains below £5,000.

Will a statutory demand appear on my credit report?

A statutory demand itself does not appear on your credit report. However, if it leads to bankruptcy or a winding-up order, this will be picked up by credit rating agencies and could affect your credit rating. Our firm can help you address the demand promptly to prevent this outcome.

Can I settle the debt after receiving a statutory demand to avoid further action?

Yes, settling the debt after receiving a statutory demand can stop further legal action. Negotiating a settlement or payment plan with the creditor is often possible. We do this a lot and our team can assist you in these negotiations to achieve a favorable outcome.

What is the role of the court in the process of setting aside a statutory demand?

The court reviews your application to set aside the statutory demand, considers the evidence and arguments from both parties, and decides whether the demand should be set aside. We can represent you in court, ensuring your case is presented effectively and professionally.

Francis Wilks & Jones acted with great professionalism, responding quickly to my requirements, leading to an eventual withdrawal of the claim against me and my son. I am extremely grateful.

A client of the firm

What are the next steps if the court sets aside the statutory demand?

If the court sets aside the statutory demand, the immediate threat of insolvency action is removed. You can then focus on resolving the underlying debt issue. Our firm can provide ongoing support and advice to help you manage your financial situation and prevent future demands.

Can multiple creditors serve statutory demands simultaneously?

Yes, multiple creditors can serve statutory demands simultaneously if you owe debts to each of them. This can complicate the situation, but our experienced lawyers can help you manage and respond to each demand effectively on its own merits and help protect your interests.

What should I do if I receive a statutory demand while I am already in an IVA or bankruptcy?

If you are already in an Individual Voluntary Arrangement (IVA) or bankruptcy, you should inform your insolvency practitioner or trustee immediately. They will address the statutory demand as part of the existing insolvency proceedings. Our team can also provide guidance on how to handle this situation.

Can a statutory demand be withdrawn once it has been served?

Yes, a statutory demand can be withdrawn by the creditor if an agreement is reached or if the demand was issued in error. We can negotiate with the creditor on your behalf to seek withdrawal of the demand, providing relief from the immediate pressure.

How can I prevent creditors from serving statutory demands in the future?

Preventing future statutory demands involves maintaining good communication with creditors, managing debts proactively, and seeking financial advice if needed. Our firm can help you develop strategies to manage your debts effectively and avoid future statutory demands.

We can help – call us today

If you have any further questions or need assistance with your specific situation, please do not hesitate to contact us. Our experienced team is here to help you navigate this challenging process and find the best solution for your needs.

Everyone I spoke to at Francis Wilks & Jones was friendly and helpful as well as being objective and transparent about my case. Communication was easy and swift all the way through and the work carried out was thorough and efficient. I feel that Andrew got me the best outcome possible. I wouldn’t hesitate to recommend them.

A recent client of the firm

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