Statutory Demands · Insolvency Warning

Received a Statutory Demand? The Deadlines Matter.

A statutory demand is more than an ordinary request for payment. It can become an important step towards bankruptcy or company winding-up proceedings if the debt is not dealt with.

If you have received a statutory demand, first establish who it has been served on, what debt is being claimed, when it was served and whether the debt is disputed. The applicable deadlines can begin running from service.

Understand the Demand Get Support
First Identify who the demand is against
Then Check the debt and date of service
Do not delay Understand the relevant deadline
Understanding the Document

What Is a Statutory Demand?

A statutory demand is a formal written demand requiring an individual or company to deal with a debt within a specified period.

It is important because failure to deal with the demand can form part of the process leading towards bankruptcy proceedings against an individual or winding-up proceedings against a company.

It is not the same as an ordinary debt collection letter.

Creditors can send reminders, demands for payment and other correspondence when money is owed. A statutory demand has a different significance because it is connected to the insolvency process.

Once a valid statutory demand has been served, the recipient will generally have 21 days to pay the debt or reach an agreement with the creditor. What can happen after that depends on whether the recipient is an individual or a company and on the circumstances of the debt.

This does not mean that bankruptcy or liquidation happens automatically when a statutory demand is received. It does mean that the document should be identified correctly and dealt with promptly.

Important Distinction
A statutory demand is not itself a bankruptcy order or winding-up order.

It is an earlier stage in the insolvency process. Further action is required before an individual can be made bankrupt or a company can be compulsorily wound up.

If Served on an Individual

Potential Bankruptcy Proceedings

A statutory demand against an individual may form part of the route towards a creditor's bankruptcy petition. An individual who disputes the demand may, where appropriate, apply to the court to have it set aside.

If Served on a Company

Potential Winding-Up Proceedings

A demand served on a company can precede winding-up action. Companies do not use the individual statutory-demand set-aside procedure; different court remedies may need to be considered where the debt or proposed winding-up action is disputed.

Statutory Demand Deadlines

21 Days. 18 Days. Why the Difference Matters.

The important dates are generally calculated from service of the statutory demand. For an individual, the deadline for applying to set the demand aside can arrive before the general 21-day period for dealing with the demand has expired.

01
Demand Served

The clock begins

Establish when and how the demand was served. The date of service is important when calculating the applicable deadlines.

18
Individuals · UK

Set-aside deadline

An individual who received the demand in the UK and wants to challenge it will normally need to apply to the appropriate court within 18 days of service.

21
General Period

21-day point

The recipient generally has 21 days to pay the debt or reach an agreement with the creditor.

→
If Unresolved

Further action may follow

Subject to the legal requirements being met, a creditor may then be able to pursue bankruptcy proceedings against an individual or winding-up proceedings against a company.

18 Days
Individual · Set Aside

The challenge deadline can come first.

If an individual received the statutory demand while in the UK, an application to challenge it and have it set aside normally needs to be made within 18 days of service. Different deadlines can apply where a demand was received outside the UK.

21 Days
Deal With the Demand

Pay the debt or reach an agreement.

A debtor generally has 21 days after receiving a statutory demand to pay the debt or reach an agreement to pay with the creditor. If the demand remains unresolved, further insolvency proceedings may become possible.

!
Important

Do not wait until day 21 if you believe the demand should be challenged.

For an individual in the UK, the normal set-aside application deadline is 18 days from service. Waiting until the end of the general 21-day period could therefore mean that the normal challenge deadline has already passed.

Deadlines can depend on the circumstances, including where the demand was received. If a deadline falls on a weekend or bank holiday, court rules may affect the final filing date. Where a demand is disputed or a deadline is approaching, appropriate legal advice may be required.
Two Different Routes

Individual or Limited Company? The Route Is Different.

One of the first things to establish is exactly who the statutory demand has been served on. A demand against an individual and a demand against a limited company can lead into different insolvency procedures and should not be treated as though they are the same.

01
Individual / Sole Trader

The Bankruptcy Route

Where a statutory demand has been served on an individual, failure to deal with it may enable the creditor to move towards a bankruptcy petition if the relevant legal requirements are met.

1
Statutory demand served

Check the creditor, amount claimed, basis of the debt and date on which the demand was served.

2
Consider whether the demand is disputed

An individual who disagrees with the demand may be able to apply to court to have it set aside.

3
The 18-day deadline may apply

Where the demand was received in the UK, an individual normally has 18 days from service to make a set-aside application.

4
Bankruptcy proceedings may follow

If the demand remains unresolved, a creditor may be able to present a bankruptcy petition where the applicable requirements are satisfied.

02
Limited Company

The Winding-Up Route

Where the debtor is a limited company, an unresolved statutory demand may precede a creditor's application to wind up the company through the court.

1
Demand served on the company

Establish the debt being claimed, the creditor and the date on which the company received the demand.

2
The company has 21 days to respond

This may involve paying the debt, reaching an agreement with the creditor or considering an appropriate formal company route with professional advice.

3
There is no individual-style set-aside procedure

A statutory demand served on a company is not challenged using the same set-aside procedure available to an individual.

4
A winding-up petition may follow

If the demand is not dealt with, the creditor may be able to apply to court to wind up the company where the relevant requirements are met.

The Key Procedural Difference
Individuals and companies do not challenge a statutory demand in the same way.

An individual may apply to have a statutory demand set aside. A company cannot use that individual set-aside procedure. Where appropriate, a company can instead apply to court to restrain a creditor from applying to wind it up. GOV.UK states that this application must be made within 21 days of receiving the statutory demand.

Understand the Related Routes
Individuals Bankruptcy Company Directors Business Debt & Insolvency Limited Companies Compulsory Liquidation
Disputing the Demand

Can a Statutory Demand Be Challenged?

Potentially. An individual who disagrees with a statutory demand may be able to ask the court to set it aside.

Whether a demand should be set aside depends on the facts and evidence. Simply disagreeing with the creditor does not automatically make the demand invalid.

Examples of Grounds the Court Can Consider
01
Disputed Debt

The debt is disputed on substantial grounds

The court may set aside a statutory demand where the debt is disputed on grounds that appear to the court to be substantial. Evidence supporting the dispute can therefore be important.

02
Money Owed the Other Way

Counterclaim, set-off or cross-demand

The court may consider a counterclaim, set-off or cross-demand where it equals or exceeds the amount being claimed in the statutory demand.

03
Security

The creditor holds security for the debt

Security held by the creditor can be relevant. The court can consider whether the demand correctly deals with that security and the value attributed to it.

04
Other Grounds

The court considers the demand ought to be set aside

The Insolvency Rules also give the court a broader power to set aside a demand where it is satisfied, on other grounds, that the demand ought to be set aside.

Existing Judgment? The position can be different.

A statutory demand is not normally the place to re-argue an existing court judgment.

Where the debt relied upon is based on an existing judgment or court order, the court will not usually reconsider the validity of that underlying debt during the statutory-demand set-aside process. Different action may be required in relation to the judgment itself.

For Individuals

What happens if you apply to set it aside?

01
An application is made to the appropriate court

The application should identify the grounds relied upon and provide supporting evidence.

02
The statutory-demand time period is affected

Under the Insolvency Rules, the time for complying with the demand stops running when the set-aside application is filed, subject to any order made by the court.

03
The court considers the application

The application may be dismissed if insufficient grounds are shown, or the court may arrange a hearing at which the evidence can be considered.

04
The court decides whether to set the demand aside

If successful, the court can make an order setting aside the statutory demand. If unsuccessful, further insolvency action may remain possible.

Limited Companies

Companies follow a different procedure.

A limited company does not use the individual statutory-demand set-aside procedure.

Where appropriate, a company can instead apply to court to restrain a creditor from applying to wind it up. GOV.UK states that this must be done within 21 days of receiving the statutory demand.

i

Challenging a statutory demand is a court process. Whether particular grounds apply depends on the facts and evidence. Stop Your Debt UK can help you understand and organise the documents you have received and, where legal advice or representation is required, help connect your case with an appropriately authorised legal professional.

If No Action Is Taken

What Happens If You Ignore a Statutory Demand?

Nothing happens automatically on day 21 — but the creditor may then be able to move to the next stage of formal insolvency action.

If the debt has not been paid or an agreement reached within 21 days, an unresolved statutory demand can be relied upon in later bankruptcy or winding-up proceedings, subject to the relevant legal requirements.

How the Situation Can Escalate
Stage 01

Statutory Demand Served

The creditor formally demands payment of the debt. The relevant time periods begin from service.

→
Stage 02 · 21 Days

No Payment or Agreement

The general response period expires without the debt being paid or an agreement being reached with the creditor.

→
Stage 03

Further Insolvency Action May Follow

What happens next depends significantly on whether the debtor is an individual or a limited company.

From Here, the Routes Separate
Individual / Sole Trader

Potential Bankruptcy Proceedings

£5,000 Creditor Bankruptcy Threshold

A creditor can seek to make an individual bankrupt where they are owed at least £5,000 and the applicable requirements for bankruptcy proceedings are met.

1
Bankruptcy petition

The creditor may apply to the court for the debtor to be made bankrupt.

2
Court hearing

The court considers the petition. The debtor has an opportunity to respond and may be able to oppose it where appropriate.

3
Potential bankruptcy order

If the court makes a bankruptcy order, the individual becomes bankrupt and the formal bankruptcy process begins.

Limited Company

Potential Winding-Up Proceedings

£750 Statutory Demand Threshold

Where a company owes £750 or more and an applicable statutory demand remains unresolved for 21 days, a creditor may be able to seek to wind up the company.

1
Winding-up petition

The creditor may petition the court for the company to be compulsorily wound up.

2
Court proceedings

The petition proceeds through the court process. The company may need urgent specialist legal and insolvency advice.

3
Potential winding-up order

If the court makes the order, the company enters compulsory liquidation and the formal liquidation process begins.

Important Distinction
Day 21 does not automatically make an individual bankrupt or put a company into liquidation.

Further formal steps are required. A creditor generally needs to make the relevant application or present a petition, and the court process follows before a bankruptcy or winding-up order can be made.

4 Months
The creditor also has a time limit for relying on the demand.

GOV.UK states that a creditor has four months to apply to bankrupt or wind up the debtor after serving the statutory demand. If the application is made later, the creditor must explain the delay to the court.

Individual Route Understand Bankruptcy Company Route Understand Compulsory Liquidation
Understanding the Difference

Statutory Demand vs CCJ: What's the Difference?

A statutory demand and a County Court Judgment can both relate to unpaid debt, but they are not the same thing. They arise through different legal processes and can lead to different consequences.

Insolvency Process

Statutory Demand

A formal demand for payment that can potentially be relied upon as part of later insolvency proceedings if it is not dealt with.

What Is It? A formal demand — not a court judgment

Receiving a statutory demand does not itself mean a court has already decided that you must pay the debt.

Main Time Period Generally 21 days

The debtor generally has 21 days to pay or reach an agreement with the creditor.

Potential Escalation Bankruptcy or winding-up proceedings

Subject to the relevant requirements, an unresolved demand may be used as part of a route towards formal insolvency action.

Challenge Individuals may apply to set it aside

Where appropriate, an individual may apply to court to have the statutory demand set aside. Companies follow a different procedure.

vs
County Court Process

County Court Judgment

A CCJ is a judgment of the County Court. It can arise where a money claim results in judgment being entered against the defendant.

What Is It? A court judgment

Unlike a statutory demand, a CCJ is an order or judgment resulting from the court process.

Important Timing The stage of the court process matters

Deadlines can arise before judgment, after judgment and when particular enforcement action is pursued.

Potential Escalation Enforcement of the judgment

Depending on the circumstances, a creditor may seek enforcement using one or more methods available for enforcing a judgment.

Challenge A CCJ may sometimes be set aside

The applicable procedure and prospects depend on how the judgment arose and the circumstances of the case.

Key Point
A creditor does not necessarily need to obtain a CCJ before serving a statutory demand.

The statutory-demand process and the County Court judgment process are distinct. The correct response therefore depends on exactly which document has been received and what legal stage has actually been reached.

Received a CCJ Instead?

Understand the County Court Judgment process.

Our dedicated CCJ page explains what a judgment means, payment, setting aside, registration and the enforcement stages that can follow.

Explore CCJ Help
LetterChekr™

Received a Statutory Demand You Don't Understand?

Before deciding what to do next, make sure you understand the document that has actually been sent to you.

LetterChekr™ is designed to help turn difficult creditor, solicitor and court-related correspondence into a clearer, structured plain-English explanation. Upload your document and review what it appears to be, the information it contains and anything that may require particular attention.

Identify the document Understand what type of correspondence appears to have been received.
Understand the key information Pull out important names, amounts, dates and information contained in the document.
Spot apparent time sensitivity See whether the correspondence appears to contain dates or deadlines that may require attention.
Understand general next steps Receive structured general information about what the document may mean and what may happen next.
Check My Letter Get Support
LetterChekr™
Document Review
Formal Creditor Correspondence

Statutory Demand

Example document visual for illustration

Potentially Important Dates, debt details and the identity of the debtor should be checked carefully.
Document Identified
Key Information Explained
Next Step Understand
01
Upload Upload the document

Use LetterChekr™ to submit supported creditor, solicitor or court-related correspondence.

02
Understand Receive a structured explanation

LetterChekr™ helps explain what the document appears to be and highlights information contained within it.

03
Next Decide what support is required

If specialist, regulated or legal assistance is needed, the appropriate professional route can then be considered.

i

LetterChekr™ provides general information and a structured explanation of supported correspondence. It does not provide legal advice or regulated debt advice and does not determine whether a statutory demand is legally valid or whether it should be challenged. Where legal advice, representation or regulated debt advice is required, an appropriately authorised professional should be used.

How We Can Help

Clearer Information. Appropriate Support.

Receiving a statutory demand can feel like the situation has suddenly become much more serious. The first priority is to understand exactly what has happened.

Stop Your Debt UK can help you organise the information and documents surrounding the demand, understand the stage that has been reached and, where specialist or regulated expertise is required, help connect the matter with an appropriately authorised professional.

01
Understand

Establish what has happened

We help gather the information, documents and correspondence needed to understand the situation — including who the demand is against, the creditor, the debt being claimed and the date it appears to have been served.

02
Review

Organise the position

Your circumstances can be reviewed through our central support and case-coordination process so the relevant documents, correspondence and background information are organised before the appropriate next route is considered.

03
Connect

Access the right expertise

Where regulated debt advice, legal advice, insolvency work or another specialist service is required, we can help connect the case with an appropriately authorised professional for that work.

04
Support

Stay organised throughout

Stop Your Debt UK can remain available for permitted administrative support, document assistance and case coordination as the matter progresses.

In Practical Terms

Start with the facts in front of you.

Statutory demands can involve short time periods and potentially serious consequences. Having the relevant information organised early can make it easier to identify what type of professional support may be required.

✓
Identify who the statutory demand is against

Confirm whether it has been served on you personally, a sole trader or a limited company.

✓
Gather the demand and related correspondence

Bring together the statutory demand, creditor letters, agreements, statements and any relevant court documents.

✓
Establish the date of service

The date and circumstances of service can be important because statutory-demand deadlines are generally calculated from service.

✓
Record any reason the debt may be disputed

If you disagree with the debt, preserve the documents and evidence that explain why. Whether there are legal grounds to challenge the demand may require professional legal advice.

Our Role

Support and coordination without blurring professional boundaries.

Stop Your Debt UK is not a law firm and is not authorised by the FCA to provide regulated debt advice. We provide permitted general information, administrative support, document assistance and case coordination.

We do not determine whether a statutory demand is legally valid, advise you whether to make a court application, or carry out regulated insolvency work. Where those services are required, the matter should be handled by an appropriately authorised solicitor, regulated debt adviser, licensed insolvency practitioner or other relevant professional.

Received a Statutory Demand?

Start by helping us understand what has happened.

Tell us what you have received, who the demand is against and when it was served. We can help you organise the position and identify the appropriate support pathway.

Get Support
Do not delay because you have contacted Stop Your Debt UK. Statutory-demand and court deadlines continue to apply. If a deadline is imminent, or you need advice about challenging a demand or court proceedings, appropriate legal advice should be sought promptly.
Statutory Demand FAQs

Frequently Asked Questions.

The document you have received, who it has been served on and the stage already reached can all affect what happens next.

These answers provide general information about statutory demands in England and Wales. Individual circumstances can differ, particularly where a debt is disputed or court proceedings have already begun.

01

How long do I have to respond to a statutory demand?

You generally have 21 days from service of a statutory demand to pay the debt or reach an agreement with the creditor. However, an individual who wants to apply to have a demand set aside will normally need to act sooner — generally within 18 days where the demand was received in the UK.

02

Can I challenge a statutory demand?

Potentially. For an individual, grounds can include a substantial dispute about the debt, an appropriate counterclaim, set-off or cross-demand, certain issues involving security, or another ground on which the court considers the demand should be set aside. Whether any ground applies depends on the facts and evidence.

03

Does a statutory demand mean I am bankrupt?

No. A statutory demand does not itself make an individual bankrupt. If the relevant requirements are satisfied and the demand remains unresolved, a creditor may subsequently present a bankruptcy petition. A further court process is required before a bankruptcy order can be made.

04

Does a statutory demand mean my company is being liquidated?

No. Serving a statutory demand does not itself put a company into liquidation. If the demand remains unresolved and the relevant legal requirements are met, the creditor may move towards a winding-up petition. A court must make a winding-up order before compulsory liquidation begins.

05

Is a statutory demand the same as a CCJ?

No. A statutory demand is connected with the insolvency process, whereas a County Court Judgment is a court judgment. A creditor does not necessarily need to obtain a CCJ before serving a statutory demand, although a statutory demand may also relate to a debt that has already resulted in a judgment.

06

What happens if I ignore a statutory demand?

Once the applicable period has expired, the creditor may be able to take further insolvency action. For an individual this can mean a bankruptcy petition; for a limited company it can mean a winding-up petition. Neither bankruptcy nor liquidation happens automatically on day 21.

07

Can a limited company apply to set aside a statutory demand?

A company does not use the individual statutory-demand set-aside procedure. Where appropriate, a company may instead need to seek court intervention to restrain a creditor from applying to wind it up. Specialist legal advice may be particularly important where the company disputes the debt.

08

What should I do when I receive a statutory demand?

Start by identifying who the demand is against, who the creditor is, what debt is being claimed and when the demand was served. Keep the demand, envelope and related correspondence. If you dispute the debt or are considering court action, obtain appropriate professional advice promptly rather than waiting for the 21-day period to expire.

Received a Statutory Demand?

Don't Ignore the Document. Understand What Comes Next.

A statutory demand can be an important point in the escalation of a debt. Start by understanding exactly what you have received, who it has been served on and which deadlines may apply.

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Time Sensitive
Do not allow a statutory-demand or court deadline to expire simply because you are seeking support. If you require advice about challenging a demand, making a court application or responding to insolvency proceedings, appropriate legal advice should be sought promptly.