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At a glance: How to deal with a formal demand for a debt.
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This summary covers England and Wales
To view information that covers Scotland, please click here.

What is a statutory demand?

A statutory demand is a demand served to you by a creditor about the money you owe them. Most creditors must give you a statutory demand before trying to make you bankrupt. The demand will include information about the debt.

You have 18 or 21 days from when the demand was served to reply, depending on what you want to do.

A statutory demand is urgent. You have 21 days to come to an agreement with the creditor. If you do not do this, the creditor will take this as proof that you are unable to pay the debt. They can then try to make you bankrupt.

What should I do if I agree I owe the money?

Try to negotiate with the creditor and reach an agreement. You have 21 days to do this. Ways you may be able to do this include:

  • Offering to pay in instalments.
  • Taking out a loan that you can afford to pay this and possibly other debts.
  • Secure the debt against your property.
  • Get a personal guarantee for the debt from another person, such as a friend or relative. This would mean that they may have to pay the debt for you.
  • Reduce the debt to below £5,000. This means the creditor can no longer make you bankrupt unless they make a joint application with another creditor.
  • Apply for a time order if the debt is on an agreement regulated under the Consumer Credit Act 1974. This is a way of asking the court to give you time to repay.
  • Apply for an individual voluntary arrangement. This is an arrangement to pay all or part of your debts to your creditors by instalments, usually over five years.

What should I do if I don’t agree that I owe the money?

You may be able to apply to the court to set aside the statutory demand. You have 18 days to do this. If your application is successful, the creditor cannot apply to make you bankrupt for not dealing with the statutory demand.

An application to set aside a statutory demand can be made on one or more of the following grounds:

  • You have a claim against the creditor which is the same or more than the debt.
  • The debt is secured against property that is worth the same or more than the debt.
  • The whole debt or the unsecured part of the debt is below £5,000.
  • The court believes there are reasonable grounds for dispute.
  • The court is satisfied on some other grounds that the demand ought to be set aside.

Learn more about this topic

If you want to learn more about this topic, you can read our in-depth guide.

Read in-depth-guide

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