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Understanding Statutory Demand

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Tuesday 18th July, 2023 | Author: Secretariat | Filed under: Good practice policies

Understanding Statutory Demand

A statutory demand is a formal legal document used in the United Kingdom to recover a debt. It is a demand for payment of an outstanding debt in accordance with the Insolvency Act 1986. Professional investigators are routinely instructed to deliver demands (process serve) so it is important they have an understanding of what the document represents. 

A statutory demand is a precursor to bankruptcy proceedings against an individual or winding up proceedings against a company.

It is a serious legal document that should not be ignored by the debtors. However, when serving a demand the professional investigator must not engage in discussion about the debt with the debtor.

Here is an overview of statutory demands in the UK:

Who Can Issue a Statutory Demand?

A statutory demand can be issued by any creditor who is owed a debt over the requisite limit. This includes individuals, businesses, and organisations.

The creditor must be able to prove that the debt is due and payable.

What Information Should a Statutory Demand Contain?

A statutory demand must contain the following information: -

The name and address of the creditor
The amount of the debt
The date the debt became due
The details of any security held by the creditor
An explanation of how the debtor can pay the debt

The statutory demand must be in a prescribed form and must be served on the individual debtor in person or by delivery to the registered office for the debtor company.

It can often also be sent by registered post or by leaving it at the debtor's last known address.

What Happens After a Statutory Demand is Served?

Once a statutory demand has been served, the debtor has 21 days to either pay the debt in full or come to a payment arrangement with the creditor.

If the debtor fails to respond to the statutory demand within 21 days, the creditor can apply to the court for a bankruptcy order (in the case of an individual) or a winding-up order (in the case of a company).

It is important to note that a statutory demand can be set aside by the court if it is defective, if the debt is disputed, or if the creditor has acted improperly.


A statutory demand is a powerful tool for creditors looking to recover their debts. It is a formal legal document that should be taken seriously by debtors. A statutory demand may be the appropriate course of action but not necessarily when the debt is disputed.