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Statutory Demand

A statutory demand if a formal demand for payment of a debt owed by either a company or an individual (the debtor). Anybody that is owed money (the creditor) can make a statutory demand, so long as the debt is less than six years old.  

Once the statutory demand is given to an individual or company, they then have 21 days to either pay the debt or come to an agreement on how it will be paid. 

It is not necessary for a judgment to have been awarded against the debtor, however the debt has to be undisputed.  

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What is a statutory demand? 

A statutory demand does not need to be issued by the courts since it is not a court document. It is a means of ensuring that a debt is settled. There are several advantages to a statutory demand: 

  • Because it does not involve the courts, it can be a means of putting pressure on the debtor to settle the debt that is relatively quick and inexpensive 

  • Preparing and serving a statutory demand is relatively simple 

Issuing a statutory demand should result in the debt being settled but it can also reveal the details of any dispute or counter-claim that exists.  

Where the debtor is an individual or company with an ongoing commercial relationship it can result in a negative impact on things moving forward. 

What are the implications of a statutory demand?  

The implications differ depending on whether the debt is owed by an individual or a company. 

Individual debtor 

Where the debtor is an individual, if the debt is in excess of £5000 and is not settled following a statutory demand, then the creditor can apply to commence bankruptcy proceedings against the debtor. Payment must be made within 21 days of the demand.  


The minimum value of the debt is much lower in this case at only £750. It is not necessary to have served a statutory demand before going down the route of presenting a winding up petition, but it can be an easier route to have the debt settled and to warn the company of the possibility of proceedings if it is not settled. Again payment must be made within 21 days of the statutory demand.  

Service of a statutory demand 

Service can be performed in various ways: 

  • For an individual debtor- giving it to them in person (using all known addresses) 

The information on this website is intended as a guide and does not constitute legal advice. Vardags do not accept liability for any errors in the information on this website, nor any losses stemming from reliance upon the statements made herein. All articles and pages aim to reflect the legal position at time they were published, and may have been rendered obsolete by subsequent developments in the law. Should you require specialist advice, tailored to your situation, please see how Vardags can help you.

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