If you are owed money by an individual or a limited company, sending a statutory demand may be an effective way to seek payment of an outstanding debt before commencing bankruptcy or company winding-up proceedings.

Before you send a statutory demand, it is important to establish whether a statutory demand is the right method of debt recovery. As someone experienced in dealing with statutory demands and defending them, I can assess your circumstances and advise whether sending a statutory demand is an appropriate option for recovering the money you are owed.

Our statutory demand service is designed for creditors who want to pursue an unpaid debt without immediately incurring the expense of court proceedings. We can prepare the appropriate statutory demand and advise on service options for individuals and limited companies.

How Much Does It Cost to Send a Statutory Demand?

Our basic fee for preparing a statutory demand is £275. This includes completion of the appropriate statutory demand forms and sending copies by post and email.

The correct statutory demand form depends on whether the debt is owed by an individual or a limited company. A personal statutory demand and a company statutory demand follow different legal procedures, so it is important to use the correct form.

Please note that sending a statutory demand by post and email may not, by itself, satisfy all the requirements for service in your particular case. If you intend to proceed with bankruptcy or winding-up proceedings, the method of service and evidence of service must comply with the applicable insolvency rules.

Basic Plan 1 – Prepare and Send a Statutory Demand

Fee: £275

Our basic statutory demand service includes:

• Preparing the appropriate statutory demand.

• Completing the relevant statutory demand forms.

• Sending copies by post and email.

• Providing an initial debt recovery option before you commit to further court proceedings.

Sending a statutory demand may prompt an individual or company to pay the debt or negotiate a settlement. Once a statutory demand has been served, the debtor generally has 21 days to pay the debt or reach an agreement to pay.

However, payment is not guaranteed. If the debt is disputed, the debtor may challenge the claim or take other legal steps. If the demand is ignored, further proceedings may be necessary.

The £275 fee relates to preparing and sending the demand as described above. Any additional service, court, solicitor or barrister fees should be confirmed separately.

Plan 2 – Professional Process Server for a Statutory Demand

If you intend to pursue bankruptcy proceedings against an individual or winding-up proceedings against a limited company, professional service of the statutory demand may be appropriate.

Process server fee: £150, plus the statutory demand preparation fee.

We can arrange for a professional process server to attend the individual’s address or the appropriate address for the company to attempt personal service of the statutory demand.

Depending on the circumstances, the service may include:

• Attendance by a professional process server.

• Personal delivery of the statutory demand where possible.

• A record of the date, time and circumstances of service.

• A certificate, statement or other evidence of service, as appropriate for the intended proceedings.

The method of service is particularly important if you intend to rely on a statutory demand in subsequent insolvency proceedings. The applicable rules require the creditor to take reasonable steps to bring the demand to the debtor’s attention and, where practicable, to serve it personally.

If personal service is not possible, the appropriate alternative method will depend on the circumstances and applicable rules.

Why Send a Statutory Demand?

Sending a statutory demand can be a useful step when attempting to recover a qualifying debt from an individual or limited company.

Unlike a court claim, a statutory demand does not itself require you to issue court proceedings. It is a formal demand for payment that may provide a route towards insolvency proceedings if the debt remains unpaid and the legal requirements are satisfied.

Reasons to consider sending a statutory demand include:

• Seeking payment: The demand formally notifies the debtor that payment is required.

• Encouraging settlement: The debtor may decide to pay or negotiate an agreement to avoid further proceedings.

• Addressing an unpaid debt: A statutory demand can be considered for qualifying debts owed by individuals and companies.

• Considering further legal action: If the debtor fails to respond appropriately, you may be able to consider bankruptcy or winding-up proceedings.

A statutory demand is not suitable for every debt. If the debt is genuinely disputed, another method of debt recovery may be more appropriate.

Sending a Statutory Demand to an Individual

If an individual owes you money, you may be able to send a personal statutory demand where the legal requirements are met.

A creditor’s statutory demand against an individual can be used as a step towards bankruptcy proceedings for a qualifying debt. The current minimum debt threshold for a creditor’s bankruptcy petition is generally £5,000.

Before sending a statutory demand to an individual, you should establish that the debt is due, the amount claimed is correct and the demand can be supported by appropriate evidence.

If the individual fails to pay or reach an agreement within the relevant period, further legal action may be available. However, a statutory demand does not automatically make the debtor bankrupt or guarantee that you will recover the money.

Sending a Statutory Demand to a Limited Company

If a limited company owes you money, sending a company statutory demand may be an option for seeking payment of the outstanding debt.

Under section 123(1)(a) of the Insolvency Act 1986, a creditor may rely on a statutory demand for a qualifying debt exceeding £750 as evidence that a company is unable to pay its debts if the relevant requirements are satisfied.

If the limited company fails to pay, secure or compound the debt to the creditor’s reasonable satisfaction within the applicable 21-day period, the creditor may be able to present a winding-up petition.

Before sending a statutory demand to a limited company, it is important to consider whether the company has a genuine defence to the debt and whether insolvency proceedings are a proportionate recovery method.

A winding-up petition involves additional costs and risks. You should therefore consider the company’s financial position and the prospects of recovering the debt before proceeding.

Statutory Demand Costs Compared With Court Proceedings

Sending a statutory demand may be less expensive initially than starting court proceedings or pursuing a bankruptcy or winding-up petition.

However, the total cost depends on the action required, the amount owed and whether the debtor disputes the debt.

If the statutory demand does not result in payment, you may need to consider further proceedings, which involve additional court fees and potentially legal representation.

For illustration, the published government fees for a winding-up petition against a company currently include a £352 court fee and a £2,600 petition deposit. These are additional to the cost of preparing and presenting the petition and any professional fees.

For a personal bankruptcy petition, separate court fees and an official receiver’s deposit apply. You should confirm the current amounts before commencing proceedings.

The decision to send a statutory demand should therefore take account of the amount owed, the debtor’s ability to pay and the likely cost of further enforcement.

Additional Debt Recovery Fees

The following figures are indicative fee figures supplied for debt recovery work. They should be confirmed before instruction and are separate from the statutory demand preparation and process server fees above.

These figures should not be taken as a guarantee of the total cost of recovering a debt. The precise work covered, court fees, judgment costs and any additional charges should be confirmed before proceeding.

Should You Send a Statutory Demand?

Before sending a statutory demand, consider whether the debtor is likely to pay, whether the debt is genuinely disputed and whether the debtor has sufficient assets to meet the debt.

A statutory demand may encourage payment without the need for immediate court proceedings. However, if the debtor cannot pay, further insolvency proceedings may not result in full recovery.

If the debt is disputed, it may be necessary to consider an alternative method of debt recovery.

Contact Nigel to discuss sending a statutory demand and establish whether this is an appropriate way to pursue your outstanding debt.

We can explain the available service options, the applicable statutory demand fees and the potential next steps if the debtor fails to pay.

Whether you need to send a statutory demand to an individual or a limited company, obtaining advice before proceeding can help you select the appropriate procedure and understand the costs involved.