If a creditor has served you with a statutory demand, important deadlines may already be running. GOV.UK says a debtor has 21 days to pay or reach an agreement. An individual who was in the UK when they received the demand must normally apply to challenge it within 18 days. This guide explains those deadlines and the distinction between communicating with a creditor and making the formal court application required to challenge an individual statutory demand.
A statutory demand is a formal demand for payment that can be used as a step towards bankruptcy or company winding-up proceedings if the statutory conditions are met. For bankruptcy proceedings against an individual, the relevant debt threshold is £5,000; for winding up a company after a statutory demand, the threshold is £750. A debtor generally has 21 days to pay or reach an agreement. An individual who was in the UK when they received the demand normally has 18 days to apply to challenge it; GOV.UK gives different deadlines where the recipient was in another country. Companies follow a different route and may need to apply to restrain a winding-up petition where appropriate. If you need to respond urgently, StatutoryLetters.co.uk provides the framework to draft a robust legal response.
You have the right to challenge a statutory demand if the debt is genuinely disputed, if you have a counterclaim, or if the demand was issued incorrectly. To respond, you must act swiftly. If you are an individual and have grounds to challenge the demand, the formal court application to set it aside is the key procedural step; a separate response letter does not replace that application or stop the deadline running. Because a response letter does not replace the formal court procedure or stop the deadline, anyone facing a statutory demand should check the applicable court process promptly and consider legal advice, particularly where bankruptcy or winding-up proceedings are possible.