Statutory demand

A formal written demand for payment of a debt within 21 days. If the debtor does not pay within the 21 days, or fails to apply to have it set aside (individual) or restrained (company), a creditor can use it as grounds to present a petition to the court for a bankruptcy order ( or winding up order (

There is no minimum amount of debt to be stipulated in a statutory demand but the debtor's non-payment may be deemed evidence of their inability to pay their debts. Consequently, if the sum demanded (or several sums if more than one demand) exceeds the money sum (£750 for companies: section 123(1)(a), Insolvency Act 1986 ( ) or equals or exceeds bankruptcy level (£5,000 for individuals: section 267(4), Insolvency Act 1986 ( ), the creditor is in a position to present a petition for a winding up order or a bankruptcy order.

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