Use of statutory demands for creditors
The outcome for a creditor who serves a statutory demand can be very advantageous. Franklins can assist with the drafting of a statutory demand to ensure its maximum potential is achieved both to tactically use the statutory demand to incite payment from the debtor, and where the creditor wishes to start proceedings. We also ensure that creditors are aware that statutory demands should not be used without careful consideration.
Furthermore, we can also provide advice on the service of a statutory demand, including postage methods or by instructing a process service to personally serve the statutory demand for an agreed fee.
Although serving a statutory demand can be a clever tactic where it results in the debtor paying the outstanding sum, the creditor needs to be prepared to take the next step, if necessary, of filing a petition for bankruptcy, where the debtor is an individual, or to wind-up a company. The intended use of a statutory demand is to begin winding-up or bankruptcy proceedings. There may also be an application made by the debtor to set aside the statutory demand, or they could respond with a counterclaim, set-off or cross-demand.
We can further assist with progressing matters should the creditor feel it appropriate to. This is likely to arise in circumstances where the service of the statutory demand does not lead to the debtor repaying the sum owed.
Debtors who receive statutory demands
The most important thing for a debtor not to do upon receipt of a statutory demand, whether an individual or a company, is ignore it. There are several options a debtor can consider upon receipt, but ignoring it is not one of them, as it could lead to serious consequences.
We can assist debtors in dealing with any statutory demand they have received and advise them of their options, such as paying the debt in full, paying by agreed instalments, applying to have the demand set aside where disputed or even making a counterclaim, set-off or cross demand.
Incorrect statutory demands
Where a statutory demand has an error in it, it is not automatically defective and does not always mean that the court will set it aside. Even where a statutory demand is incorrect, it is still strongly advisable not to ignore it and to seek independent legal advice for any assistance. We can again assist in providing advice on the best options of recourse in such circumstances and where any other such disputes arise surrounding a statutory demand.