Legal issues
The debt should be presently due, accurately stated and suitable for insolvency enforcement. Insolvency procedure is not designed to determine an ordinary contractual dispute. Where liability is genuinely contested, a County Court claim may be the appropriate route instead.
A company cannot use the same statutory-demand set-aside procedure available to an individual. GOV.UK guidance explains that a company can instead apply to restrain a creditor from presenting a winding-up petition and should act within the 21-day period.
For individuals served in the UK, the current GOV.UK deadline to apply to set aside a statutory demand is 18 days.
Evidence that matters
Keep the contract, invoices or judgment, debt calculation, earlier correspondence, proof of the debtor's identity and address, process-server evidence or other service record, and any evidence about insolvency or a threatened dispute.
Reasonable lines of enquiry
Before service, verify the debtor's legal identity, current address or registered office, debt amount, dispute status and apparent solvency. Check Companies House filings and any known insolvency events for a company debtor.
Consider whether an ordinary letter before action, money claim, judgment enforcement or negotiated payment plan offers a more proportionate route.
What happens next
The demand is prepared and served using the correct form and method. The debtor has 21 days to pay or reach an agreement. If the demand is ignored and the statutory threshold and procedural requirements are met, the creditor may consider a bankruptcy or winding-up petition.
GOV.UK states that the creditor generally has four months after service to apply to bankrupt or wind up the debtor, subject to explaining delay if later.
Immediate steps
Do not use a statutory demand merely to frighten a debtor where liability is genuinely disputed. Check the debt, threshold, form, service route and insolvency strategy before taking the step.
What should you send us?
Send the contract, invoices or judgment, amount due, debtor type and legal name, address or registered office, all dispute correspondence, previous demands and any information about insolvency or security.