Serving a Statutory Demand is a way to prove that you are owed a sum of money by another person and that they cannot pay it. The Statutory Demand is not a court procedure so you do not need to send it to the court and pay a fee. However, you must follow the rules or the document may not be valid and a bankruptcy petition following it may be dismissed.
Getting it right
The Statutory Demand must be in the prescribed form as provided in rule 10.1 of the Insolvency Rules 2016. It must be completed correctly and it must be served correctly. The rules require that you must do all that is reasonable to bring the statutory demand to the debtor’s attention. What does this mean? It means that:
- If practicable, the statutory demand must be served personally on the debtor
- If this cannot be done other methods of service may be accepted by the court as sufficient. This may include first-class post or insertion through a letterbox.
- If you have a judgment against the debtor and you have evidence that he or she is trying to avoid service of the statutory demand, the rules permit you to advertise the statutory demand and this will be treated as good service of it.
If the debtor does not comply with the statutory demand, or they apply to set it aside, the decision as to what to do next is up to you. You are not obliged to do anything. You can present a bankruptcy petition at any time within 4 months of service of the demand. If you run over that time you may still be allowed to present the petition if you have good reason for the delay.
Taking legal advice
Serving a statutory demand may be a quick and inexpensive way to find out if a person intends to pay the money that is owed to you. However, if you get it wrong you may have to pay legal costs to the debtor.
- Is the statutory demand correctly completed?
- Has the demand been complied with?
- Is the statutory demand likely to be set aside?
- How many times should you attempt personal service of the statutory demand?
- Where should this be done?
- What alternative method of service should be used?
- How should you advertise a statutory demand?
Our solicitors are happy to advise on these and other legal issues in connection with making someone bankrupt.
For more information proceed to Challenging a Statutory Demand