What is a statutory demand
What a statutory demand is and how long it can last.
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 are an individual and you have been served with a statutory demand, you can ask the High Court to 'set aside' (dismiss) the demand. If you wish to do this, your application to the Court to have the demand set aside must be made within 18 days from the date on which the statutory demand was served on you. In the case of a company, an injunction can be sought to restrain the creditor from petitioning for winding up or appointing an administrator.
If the debt is not paid the creditor can:
- in the case of personal debts, including debts incurred as a sole trader or when trading in partnership with someone else, present a petition to the High Court for a bankruptcy order if the debt is for over 拢5,000
- in the case of company debts, present a petition to the Court for a winding-up order, if the debt is for over 拢750
To find out how to serve a statutory demand see serving a statutory demand.