A statutory demand is a document that can be issued to a debtor who has loan repayment arrears. It is the first step a creditor may take to get a court order against you that will force you to repay a debt.
In the event that you are unable to repay your debts on time, then the creditor may use the court’s power to get you to settle the debt or begin making reasonable payments. Creditors also have the option of bankrupting you. The statutory demand is the first step of that process.
A Statutory Demand requires you to settle the outstanding debt by either:
Paying monthly/weekly payments
Paying a lump sum
Securing it against a property or other assets.
Within eighteen days of receiving a statutory demand, you can apply to your county court to set it aside under the following circumstances:
The amount of money owed is in dispute
The debt is not payable now.
You are prepared to secure the debt to the creditors satisfaction under the creditors stated terms.
The amount owed is less than £750.
The statutory demand has been issued in error or does not comply with rules.
You can and are about to repay the debt.
You have a counterclaim of more than the money owed.
In the event that you fail to comply with a statutory demand or ignore it, then the creditor is allowed to present a petition for bankruptcy twenty-one days from the date of issue.
Sometimes, a statutory demand is used as a mere scare tactic. They know that when someone can’t repay a debt, they have more than one debt, and that whomever shouts the loudest will get paid first. Nevertheless, you should always take statutory demands seriously.
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