Statutory Demands

Some creditors will use a statutory demand as a scare tactic. However, they should always be taken very seriously, particularly if it has been issued by the Inland Revenue or HM Customs & Excise for VAT.

A statutory demand will require you to do one of three things:

• Pay off your outstanding debt in full
• Pay off your outstanding debt in installments
• Secure your debt against your property

Consequences

If this is not complied with, the issuer of the statutory demand can file for your bankruptcy within 21 days. If you wants to avoid bankruptcy you should consider doing one of the following:

Making payments to reduce the debt to less than £750,

• Making an offer to pay by instalments,
• Making an offer of a reduced amount in settlement of the debt,
• Applying to have the statutory demand 'set aside'.

Getting the Demand Set Aside

You can apply to the county court within 18 days for the demand to be set aside'under the following grounds:

• The demand has been issued under false grounds.
• You dispute the amount owed.
• There is a counterclaim of more than the money owed.
• The amount owed is less than £750.
• You are able to pay off the debt.

If you are still in need of advice, contact your local Citizens Advice Bureau.