Last Updated on: 12th December 2023, 06:44 pm
A Statutory Demand, as outlined in the Insolvency Act 1986, is a formal request for the settlement of a debt. It is a crucial legal tool for creditors seeking payment from debtors, whether individual or corporate.
For debtors who believe they have received an unjust or incorrect Statutory Demand, there is a legal option to dispute and potentially have it set aside. Here’s a structured approach to challenging such a demand:
- Consult a Legal Professional: The first action for a debtor should be to seek advice from a solicitor with expertise in insolvency and debt matters. This expert counsel is vital to understand the particularities of the case and to strategise effectively.
- Valid Reasons for Setting Aside a Statutory Demand: Debtors need to be aware of the legitimate grounds for disputing a Statutory Demand. These generally include:
- Challenging the legitimacy of the debt.
- A debt amount that falls below the required statutory limit.
- Flaws in the format or substance of the demand.
- Existence of a counterclaim, set-off, or cross-demand that surpasses or is equal to the debt.
- Essential Forms for the Procedure in England and Wales:
- Form 6.4 (Rule 6.4(1)): Employed by the debtor to formally request the setting aside of the demand, stating the grounds for doing so.
- Form 6.5 (Rule 6.4(2)): Used to provide supplementary evidence and information to back the application.
- Form 6.6 (Rule 6.4(3)): Applicable if the debtor is also seeking an injunction against the creditor’s bankruptcy petition proceedings.
These documents should be correctly filled and submitted to the court, which will schedule a hearing to evaluate the application. It’s imperative to adhere to the proper procedures and supply all required information and proof to strengthen the application.
Expert Commercial Law’s Role in Debt Recovery
Expert Commercial Law offers a unique service by connecting clients with a panel of solicitors specialising in commercial law. While we are not a solicitors’ firm ourselves, we facilitate expert legal advice and practical assistance for commercial law cases, including the setting aside of Statutory Demands. Our panel is also proficient in handling other commercial legal matters like business energy claims, shareholder disputes and contract disputes.
