Dealing With A Statutory Demand

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Dealing With A Statutory Demand
Topic Started: Nov 14 2005, 02:56 PM (318 Views)
whistleblower	Nov 14 2005, 02:56 PM Post #1
www.saynotoyes.co.uk Posts: 2,649 Group: Admin Member #1 Joined: May 13, 2005	I have received a Statutory Demand, what should I do? Firstly, do not ignore it. Take it out of the bin! You need to act quickly but there are remedies to this situation. A Statutory Demand is a formal legal document requiring you to pay off an outstanding debt either by instalments or a lump sum or to secure it against a property. If you do not comply with the demand, the creditor may be able to apply for bankruptcy against you within 21 days. Some creditors use the issuing of a Statutory Demand as a tactic to frighten you but they should always be taken seriously. In particular a Statutory Demand issued by the VAT (HM Customs & Excise) or the Inland Revenue should be regarded as serious. Seek immediate advice from your local CAB www.nacab.org.uk or other free debt advice agency (details below). Can I deal with this myself? If you wish to act on your own behalf you should apply within 18 days to your local County Court to "set aside" the Statutory Demand under one of the following circumstances: There is a dispute regarding the amount of money owed. The sum owed is less than Ł750. The demand has been issued in error. You have means of paying the debt (i.e. can make a reasonable offer). There is a counterclaim of more than the money owed. Unless such an application is made, the Statutory Demand must be complied with to prevent any further action being taken against you. I need further help If you are unable to make the payments requested you may need help to negotiate with your creditors to achieve a level of repayment you can afford. Contact a free debt advice agency for further information. Payplan - The Free Debt Advice Agency Freephone 0800 917 7823 Email: help@payplan.com Web: CLICK Citizens Advice Bureaux - CLICK National Debtline - 0808 808 4000
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whistleblower	Nov 16 2005, 02:19 PM Post #2
www.saynotoyes.co.uk Posts: 2,649 Group: Admin Member #1 Joined: May 13, 2005	Statutory Demand A statutory demand requires that the debtor either: Pays the relevant amount Offers to secure it against property Offers to repay the debt in a way that is satisfactory to the creditor. For example, by instalments. Some creditors use statutory demands as a way of persuading debtors to pay off the debt, usually by borrowing elsewhere. However, statutory demands should be taken seriously. After 21 days the creditor can petition for a bankruptcy order. Therefore, it is usually worth contacting the creditor by telephone and asking them what their next step will be. Ignoring a statutory demand may encourage the creditor to petition for bankruptcy. It is worth bearing this in mind, particularly if the debtor is contemplating petitioning for his own bankruptcy. If the debtor wants to avoid bankruptcy he should consider: Making payment(s) to reduce the debt to less than Ł750; or Making an offer to pay by instalments; or Making an offer of a reduced amount in settlement of the debt; or Applying to have the statutory demand set aside Setting aside a statutory demand. 21 days after the serving of the statutory demand, the creditor can petition for the debtor’s bankruptcy unless it has been ‘set aside’. An application to set aside the statutory demand can be made if: There is a substantial dispute about the money owed; There is a counterclaim of more than the money owed; The creditor holds security that equals or exceeds the debt in value; On ‘Other Grounds’. Though not defined, these can include: The demand was issued in error, e.g. for a secured debt or for an amount of less than Ł750; Execution has been stayed on a judgement; The debtor is complying with an instalment order (so the debt is not strictly due); and The creditor failed to comply with the rules and prejudiced the debtor in the process; An application to set aside must be made with 18 days of the statutory demand being served. Forms 6.4 (application) and 6.5 (affidavit) must be completed and taken to the court. However, the court can dismiss the application if there are no grounds. If there are grounds, a hearing will be arranged at which the court will decide whether the demand will be set aside. If the debt falls under the Consumer Credit Act 1974, the court should also consider if any relief is available to the debtor under the Act. This would include a time order application.
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