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What is a statutory demand?

If someone owes you money that they will not repay, a statutory demand is one way to try and recover that debt. A statutory demand is a written request to a debtor (person or business that owes you money) for the payment of a debt. It tells the debtor things like:

• how much must be paid
  
• when payment must be made – for example, immediately or by a certain date
  
• what will happen if the demand is ignored – for example, court action to recover the debt
  
• details of who they can contact about the demand
  
• their right to dispute (disagree with) the demand

What to do if you receive a statutory demand

If you receive a statutory demand you have:

• 21 days (or 28 if you live abroad) to ‘satisfy’ the demand
  
• 18 days (or 22 if you live abroad) to ‘set aside’ the demand - challenge it in court to get it cancelled

A demand is satisfied if the debt is ‘settled’ (paid in full) or ‘secured’ (an agreement is reached to pay it, for example, in instalments). To set aside a demand - see the section ‘How to challenge a statutory demand’.

You shouldn’t ignore a statutory demand. If it isn’t satisfied or challenged, the creditor (person owed money) can apply to the court to issue a bankruptcy or winding-up order against you. Bankruptcy orders are for individuals and sole traders and ‘winding-up’ orders are the equivalent for a company.

If you own a business that has received a statutory demand you can get more information on what to do from the Businesslink website.

Get professional advice

You should get professional advice about statutory demands and when they are suitable for recovering a debt. They may not be if the debt is more than six years old or you have an order from the court for payment of the debt.

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Forms to send a statutory demand

You need to use certain forms for a statutory demand and send it to the debtor in a particular way

For an individual or sole trader use one of these three statutory demand forms:

• form 6.1 – for a specific amount payable now
  
• form 6.2 – for a specific amount payable now following a judgment or a court order
  
• form 6.3 – debts payable in the future

For a registered or unregistered company you have to use statutory demand form 4.1.

You can get forms 6.1 and 4.1 from The Insolvency Service website. The other forms you can buy from any legal stationer or speak to a legal advisor.

You can get help completing the forms from your local Citizens Advice Bureau. A solicitor can help you, but they may charge a fee.

• Get the statutory demand forms 4.1 and 6.1 Opens new window

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How to send a statutory demand

You must do everything you can to bring the statutory demand to the attention of the debtor. This is a process called ‘serving’ the statutory demand.

You can get advice on how to serve a statutory demand from a solicitor or advice agency like your local Citizens Advice Bureau.

Proof of serving a statutory demand

You should keep proof that the statutory demand was served, this is needed if you take further action to recover the debt.

How to challenge a statutory demand

If you don’t agree with the statutory demand, you can apply to the court to have it set aside (cancelled). The basic steps are detailed below. The steps for a limited company are different. You should get legal advice on how to set aside a statutory demand.

You have to apply to the court to set aside a statutory demand, usually within 18 days of receiving it or it being advertised in a newspaper. If you are abroad, the time limit is 22 days.

Step one: complete form 6.4 (application to set aside a statutory demand) and form 6.5 (set aside statement of truth). A statement of truth confirms that your application is true and correct.

Step two: the forms need to be filed (presented) at a court. Your solicitor or local county court can tell you which one to use.

Step three: the court will consider your application and either dismiss it immediately or fix a date for hearing your case. If accepted, the time detailed in the demand to satisfy the debt will be suspended.

Step four: at the hearing the court can agree to set aside the statutory demand or dismiss your case. If dismissed, your creditor can apply to the court to make you bankrupt and the time detailed in the demand for you to satisfy the debt will restart.

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• Forms to set aside a statutory demand Opens new window

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