Formal requests for payment: statutory demands

A statutory demand is a written request for payment of a debt. If the demand is not met, the creditor may follow up with a petition for a bankruptcy order for personal debts, including debts incurred as a sole trader or when trading in partnership with someone else, or a winding-up order for debts of a limited company.

Once you have been declared bankrupt or your company has been wound up by the courts, the details will be given to The Insolvency Service, the government agency responsible for dealing with financial failure and misconduct. The Insolvency Service has a network of official receivers’ (ORs’) offices throughout England and Wales. Your case will be allocated to your local OR’s office which will find out how and why you or your company became insolvent.

This guide explains what statutory demands are, how to serve a statutory demand – in the UK or abroad – what to do if one is served on you, which forms to use and what part statutory demands play in insolvency proceedings. It also details the procedures and forms that are required according to who owes money – eg an individual or sole trader, or a registered or unregistered limited company.

What is a statutory demand?

If a creditor is owed money, they can issue a statutory demand. A statutory demand is a formal written request that a debt must be paid.

An individual or business that receives a statutory demand has 21 days to:

• settle the debt
• secure the debt – reach an agreement for payment

If you want to ask the court to ‘set aside’ (dismiss) the demand, this must be done within 18 days of the date the statutory demand was served.

If the debt is for over £750 and is not paid, then the creditor may present a petition to the court for a bankruptcy order for personal debts, including debts incurred as a sole trader or when trading in partnership with someone else, or a winding-up order for debts of a limited company.

If the creditor has previously got a court order that the money must be paid (judgment) they can ask the court to enforce it by sending bailiffs to the debtor’s home or business premises. In this case, the creditor can present a bankruptcy or winding-up petition without serving a statutory demand if enforcement fails to get some or all of the money, and if the debt is for more than £750.

To find out how to serve a statutory demand – either in the UK or abroad – see the page in this guide on serving a statutory demand.

For information on setting aside a statutory demand, see the page in this guide on what to do if you are served with a statutory demand.

Does a statutory demand expire?

There is no expiry period for a statutory demand. However, a debt must not be more than six years old or be based on a default judgment more than six years old.

This six-year period can start to run again from any date the debtor agrees the debt exists and may be extended more than once. If you think a debt is affected by this time limit, you should take legal advice.

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Serving a statutory demand

How you serve a demand varies according to who you are serving it on – whether an individual or a company.

Individual or sole trader

If an individual or a sole trader owes you money, you must do everything you can to bring the statutory demand to the attention of the person concerned and, if possible, serve it personally.

You can employ a process server to do this for you – a process server serves court and legal documents on behalf of:

• solicitors
• lawyers
• local authorities
• government agencies
• companies
• private individuals

If the debtor is avoiding service, you could:

• Send the demand by first class post or put it through their letterbox. If you do this yourself and later present a bankruptcy petition to this person, you will need to complete a certificate of service – verified by a statement of truth (form 6.12) – explaining the steps you took to serve the statutory demand, how you served it and on what date you believe they saw it. For further information, see the page in this guide on proof of serving a statutory demand.
• Advertise the statutory demand in a newspaper. To do this, the money must be owed under a judgment or order of any court, you must know or believe that the debtor has left their address or is keeping out of your way to avoid service. You must also believe that you would not be able to recover the money owing to you by enforcing the court order.

Registered limited company

If a registered limited company owes you money, you can serve a statutory demand by delivering it to the company’s registered office. If you cannot do this, you can send one by registered post. The demand will be properly served if the company acknowledges it by signing the Post Office receipt.

Unregistered limited company

If an unregistered limited company owes you money, you may serve the statutory demand by:

• leaving it at the company’s main place of business
• delivering it to the company secretary, manager or principal officer of the company
• serving it in a way directed or approved by the court

Statutory demand forms

In order to issue a statutory demand, you must complete the correct forms, and this depends on who you are serving the demand on. For guidance on the forms you need, see the page in this guide: what should a statutory demand contain?

You will need proof of service, if you intend to carry on with debt recovery proceedings after the debtor has not paid the statutory demand. For further information, see the page in this guide on proof of serving a statutory demand.

How to serve a statutory demand abroad

You should serve a statutory demand abroad in the same way as in the UK. However, the time limit to comply with the demand is 28 days and to apply to set aside (dismiss) the demand is 22 days.

For further guidance on setting aside a statutory demand, see the page in this guide on what to do if you are served with a statutory demand.

There are some restrictions on you being able to present a bankruptcy petition if a debtor who lives abroad fails to comply with a statutory demand. For example:

• If the debtor lives in a European Union (EU) member state other than Denmark, you will not be able to present a bankruptcy petition against that person if they carry on business or earn their living in that EU country.
• If the person is retired or unemployed, the court will look at the place they normally live. You have to make the person bankrupt under the law of the country where they normally work or live.
• If the debtor lives in a country that is not in the EU or if they live in Denmark, then you will be able to present a bankruptcy petition only if they have lived or had a residency here, or carried on business here at any time in the three years preceding the date you present the bankruptcy petition. The only exception is if they are in England or Wales on that day.

It may not be necessary to serve a statutory demand at all. If you have previously obtained a court order, you can ask the court to enforce it. You can download information on enforcing a court judgment from the HM Courts & Tribunals Service (HMC&TS) website (PDF, 178K) – Opens in a new window. You can present a bankruptcy or winding-up petition without serving a statutory demand if enforcement fails to get some or all of the money, and if the debt is more than £750.

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Information a statutory demand should contain

A statutory demand must explain to the debtor:

• the purpose of the demand
• what will happen if they fail to comply within the 21-day time limit – ie that bankruptcy or winding-up proceedings may follow
• the time and manner in which the demand must be complied with
• their right to apply to the court to have the statutory demand set aside (dismissed) or to stop the presentation of a winding-up petition

The demand must also include the contact details of a named individual with whom the debtor can communicate regarding the debt.

You – or someone authorised to sign on your behalf – must sign and date the demand. It must state:

• whether the debt is payable immediately or at a future date
• the amount of the debt and the consideration for it – if there was no consideration, then it must detail the way in which the debt arose
• details of the unsatisfied judgment or – if none – the basis for the creditor’s belief that the debtor appears to have no reasonable prospect of being able to pay

What forms should I use to issue a statutory demand?

In order to issue a statutory demand, you must complete the relevant form. The forms vary according to who you’re serving the demand on and the circumstances surrounding the debt.

If you’re serving a demand on an individual or a sole trader, you need to use the appropriate forms. These include:

• Form 6.1 – Debt for Liquidated Sum Payable Immediately – if the debt is for a specific amount that is payable now. Download form 6.1 from the Insolvency Service website (DOC, 49K) – Opens in a new window.
• Form 6.2 – for a debt of a specific amount that is payable now following a judgment or other court order, where there has been no attempt to enforce the judgment. Download form 6.2 from the Insolvency Service website (DOC, 49K) – Opens in a new window 
• Form 6.3 – for a debt that is payable in the future. Download form 6.3 from the Insolvency Service website (DOC, 49K) – Opens in a new window.

If a registered or unregistered company owes you money, you need to use form 4.1. Download form 4.1 from the Insolvency Service website (DOC, 61K) – Opens in a new window.

You can also obtain copies of these forms from legal stationers.

For more information about debt and recovering money you’re owed, see our section on debt recovery.

If you own a business that has been served a statutory demand, see the page in this guide on what to do if you are served with a statutory demand.

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Proof of serving a statutory demand

If the debtor does not pay the statutory demand and you intend to carry on with debt-recovery proceedings, you will need to prove you have served the demand. One option is to employ a process server. A process server serves court and legal documents on behalf of:

• solicitors
• lawyers
• local authorities
• government agencies
• companies
• private individuals

If you’re intending to present a petition for a bankruptcy order or winding-up order based on a statutory demand, the total debt must be more than £750. However, a number of creditors for smaller amounts can put their claims together to reach this minimum.

If the debtor does not settle the debt or reach an agreement for payment within 21 days from the date of serving of the statutory demand, or does not ask the court to set aside (dismiss) the demand within 18 days from the date of serving the statutory demand, you can ask the court to make a bankruptcy order or winding-up order.

Statements of truth

When you present a petition for a bankruptcy order, you must also file a certificate of service, verified by a statement of truth. If the statutory demand was served personally on the debtor you should use form 6.11. If there was substituted service you should use form 6.12 giving details of how and when the statutory demand was served.

The person who authenticates the statement of truth must be the person who served the statutory demand. However, if the debtor acknowledges service and agrees that they have been served it, then the creditor – or someone acting on their behalf – can authenticate the statement of truth.

If the court is not satisfied that the creditor has discharged their obligations with regard to service, it may refuse to accept a bankruptcy or winding-up petition.

If the statutory demand was not personally served or if the debtor has not acknowledged service, then a person with direct knowledge of how the statutory demand was served should write a statement of truth. This should detail how they served – or tried to serve – the statutory demand, and the date they believe the statutory demand came to the debtor’s attention.

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What to do if you are served with a statutory demand

You should never ignore a statutory demand. If the debt is for £750 or more, it could lead to you being made bankrupt or your company being wound up by the court.

To avoid this, you must comply with the statutory demand within 21 days. You can either settle the debt or secure it by reaching an agreement for payment. However, if you dispute it and believe that you have good reason to, you should take action to stop the creditor presenting a bankruptcy or winding-up petition.

Before you take any action, you should consider taking legal advice.

Disagreeing with a statutory demand

If you are an individual, you have 18 days from when the statutory demand is served on you, or from the date of the first advertisement, to apply to the court for the statutory demand to be set aside – dismissed or cancelled. If you live abroad, then the time limit for setting aside the demand is 22 days.

Which court should I apply to?

You must apply to the court where you would present your own bankruptcy petition, using form 6.4 (the application) and form 6.5 (the witness statement in support of the application).

You can find all insolvency and bankruptcy forms on the Insolvency Service website – Opens in a new window. Alternatively, you can obtain these forms from a legal stationer.

If the creditor who has filed the bankruptcy petition is a government department and the statutory demand says that the petition will be presented in the High Court, you should apply to the High Court.

If the debt is subject to a judgment and the statutory demand says that the petition will be presented in the High Court, you should apply to the High Court.

If the deadline for you to apply to have the demand set aside has passed, you may apply for an extension of time to a Judge in the High Court or to a District Judge.

From the time you file the application to set aside the statutory demand the deadline for you to comply with it stops running.

Courts will only grant your application if there is a genuine dispute about whether the debt exists. A small mistake in the statutory demand about the amount owed will not make it invalid.

Provided an application to set aside the statutory demand is not dismissed immediately, the court will fix a time for hearing the application and give five working days’ notice to:

• you or your solicitor
• the creditor
• whoever is named in the statutory demand as the person you should contact about the debt

Setting aside a statutory demand

The court has various grounds for setting aside a statutory demand. For example, it may grant an application for setting aside if:

• the debtor appears to have a counter-claim, set-off or cross-demand which is equal to or greater than the amount specified in the statutory demand
• the debt is disputed on grounds the court considers to be substantial
• it appears that the creditor has not disclosed some security or the court is satisfied that the value of the security is greater than or equal to the amount claimed
• the court is satisfied on other grounds that the demand ought to be set aside

What happens if the court dismisses an application to set aside a statutory demand?

If the court believes there is no good reason for setting aside the statutory demand, it may dismiss an application without giving notice to the creditor. But it must make an order authorising the creditor to present a petition immediately or at a specified date.

If the court does dismiss your application, then the deadline for you to pay or secure the debt – which was suspended – will restart from the day your application is dismissed.

Applying to set aside a statutory demand

To apply to have a statutory demand set aside, you need to use form 6.4 – application to set aside a statutory demand. Download form 6.4 from the Insolvency Service website (DOC, 40K) – Opens in a new window.

You also need to submit form 6.5 – a witness statement in support of application to set aside a statutory demand. Download form 6.5 from the Insolvency Service website (DOC, 40K) – Opens in a new window.

Companies

Insolvency law does not specifically cover an application by a company to set aside a statutory demand. However, any person has the right to defend legal proceedings, so a company can make an application to stop the process.

If a company has a valid defence to the statutory demand, it can apply to the court to stop the creditor presenting a winding-up petition. Legal advice should be sought before applying to the court.

If a company succeeds in its application to stop the creditor presenting a winding-up petition, the creditor may have to pay the costs of the hearing.

Which court should I apply to?

An individual must apply to the court where they would present their own bankruptcy petition, unless:

• the creditor is a government department
• the statutory demand says that the petition will be presented in the High Court

A company must apply to a court having jurisdiction to wind up the company, for an injunction restraining the creditor from presenting a winding-up petition.

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