A Guide To Statutory Demands For Debtors

If you have been served with a Statutory Demand from a creditor, you or your company may be at risk of being made bankrupt or wound up. This article in our insolvency series explains what to do if you wish to avoid the adverse consequences of a Statutory Demand.

It is very important not to ignore a Statutory Demand, and to seek legal advice as to the best action to take in your specific situation.

What is a Statutory Demand?

A Statutory Demand is a formal document which gives a debtor 21 days to make payment before a creditor is entitled to take further action to recover their debt.

A Statutory Demand does not itself commence Court proceedings; it is not issued at Court and requires no Court fee. However, it is still a formal legal document and is seen as a more aggressive way for a creditor to recover their debt from you, compared to a Letter Before Action, for example.