A Statutory Demand, rooted in the Insolvency Act 1986, is a formalised call for debt repayment used by creditors to compel payment from debtors, whether they are individuals or businesses.
For debtors who question the legitimacy of a Statutory Demand they have received, there is a legal pathway to challenge and possibly get it set aside. The following steps outline the process of disputing a Statutory Demand:
- Professional Legal Consultation: It’s crucial for a debtor to initially seek advice from a solicitor who is experienced in insolvency and debt-related legal matters. This step is essential to understand the specifics of their situation and to plot an appropriate legal response.
- Valid Grounds for Challenging a Statutory Demand: Understanding the legitimate reasons for disputing a Statutory Demand is key for the debtor. These grounds typically include:
- Contesting the accuracy of the debt.
- The debt being below the statutory minimum.
- Errors in the statutory demand’s format or content.
- The debtor having a counterclaim, set-off, or cross-demand that meets or exceeds the debt.
- Crucial Forms for the Challenge in England and Wales:
- Form 6.4 (Rule 6.4(1)): The application form for the debtor to challenge the statutory demand.
- Form 6.5 (Rule 6.4(2)): This form provides evidence and details to support the challenge.
- Form 6.6 (Rule 6.4(3)): Used if the debtor is also seeking an injunction against a bankruptcy petition from the creditor.
The debtor must complete and submit these forms to the court, which then schedules a hearing to review the application. It is important to follow the correct protocol and present all necessary evidence and information for a successful challenge.
Assistance from Expert Commercial Law in Debt Recovery
Expert Commercial Law, through its panel of solicitors experienced in commercial law, offers invaluable assistance for parties looking to set aside a Statutory Demand. While we are not a law firm, we provide access to a panel of solicitors for legal advice and cost-effective support on commercial law cases, including setting aside Statutory Demands. Our panel also deals with other commercial matters like business energy claims, shareholder disputes and contract disputes.
