Why Are Statutory Demands Becoming More Common?

Sunny summer is turning into wet Autumn and the economic weather for the UK might be turning colder too


With an increasingly negative economic backdrop many individuals and companies are trying to recover owed funds as quickly as possible and the use of statutory demands is increasing as a result.

Why Are Statutory Demands Becoming More Common?

statutory demand












If your company owes a business more than £750 then you could be served with one, but what is a statutory demand? 


Briefly, it’s a formal, legal demand against a company that sets out the details and amount of any owed debt. It gives the debtor 21 days to pay in full with potentially serious consequences if they don’t – including the threat of a winding up petition brought against them. 


Receiving a statutory demand is bad news. As well as being the ultimate threat to your business, following the issue of a winding up petition you’ll find it hard to get new credit; be unable to dispose of assets or pay monies from the company bank account without a validation order, which will likely be frozen pending a winding up order being considered by the court. 


There have also been reports of ‘no-win no-fee’ debt collectors who’ll produce a demand alongside increasingly aggressive tactics including harassment and threats to recover the monies.  


Some collectors inaccurately call themselves enforcement officers and will turn up at company properties without a court order, demanding immediate payment and threatening to remove goods – despite having no legal right to do so. 


As a result many businesses are paying debts alleged in statutory demands despite having no legal obligation to do so. If you receive a statutory demand from such a rogue debt collector you should seek it being set aside if you do not owe the debt. If you are successful in such an application, the court is likely to grant costs in your favour, turning matters round so that the company claiming you owe them money now owes you instead.


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If you’ve received a statutory demand then it’s time to talk to an expert. 

Speak to one of our team today to arrange your free initial consultation. We can discuss all your options and hopefully find a way out of the impasse, allowing you to concentrate on the future of your business.

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