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Pay Up! – Collecting Debt Through a Statutory Demand

Most businesses will, at some point, deal with customers who refuse to pay up long after their payables are due. Minimising bad debt is critical for companies to catch up on their income, but demanding payment for debt can be a challenging task.

If an individual or company owes you debt, you can issue a statutory demand against them. This allows you to demand payment without going to court, and is applicable for debts amounting to £5,000 for an individual and £750 for a company.

Why Serve a Statutory Demand

Serving a statutory demand is a quick and inexpensive way of demanding payment of a debt. The demand can be prepared and served quickly with the help of process servers. Since the demand doesn’t involve you and the debtor going to court, you don’t have to pay court fees.

A statutory demand can convince debtors to pay or negotiate. By receiving a demand, they will know that failure to pay their debt results to the winding-up of their company or a bankruptcy petition.

How to Serve a Statutory Demand

Fill out the required fields in the statutory demand form provided by the government. Make sure that the debt amount and complete details are listed in the document.

You can serve the statutory demand form by:

  1. Sending it to the debtor’s known addresses

  2. Leaving it at the registered office or the main place of business of the debtor’s company

  3. Giving it to the debtor’s company secretary, director, manager or principal officer

  4. Having it served by a process server

Keep a copy of the statutory demand and documents that prove the time of date it was served, such as the postage receipt or a confirmation from the process server. There must also be a confirmation that the debtor has received the demand.

What Happens After Serving a Demand?

Once the statutory demand is served, the debtor has 21 days to pay the debt, whether in full or by instalments. They can also arrange for a meeting with you to negotiate to write off the debt, offer security against the debt or reduce the amount.

The debtor also has the option to cancel or set aside the debt on the following grounds:

  1. If the debtor has a genuine dispute with you about the debt

  2. If the creditor owes as much money as the debtor owes the creditor

  3. Incorrect issuance of the demand

  4. If the debt is less than £5,000 (for individuals) or £750 (for companies)

Action for cancellation should be made 18 days after the statutory demand is served.

If the debtor doesn’t pay or respond to the demand within 21 days, you can start bankruptcy proceedings or wind up their company.

Serve Your Statutory Demand Quickly with MS Webb’s Process Servers

A statutory demand is a quick and cost-effective way to recover your debt, but there are specific rules over how it must be served. If you don’t serve the demand correctly, you may delay the process.

Concentrate on what matters most while we take care of locating your debtor and serving the statutory demand on your behalf. MS Webb’s team of process servers can handle all aspects of your case, tailoring their approach to serve your documents in a firm but professional manner.

To request for a process server or make an enquiry, call us on 0844 544 4804 or use our online contact form.

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