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Statutory Demand Solicitors

A statutory demand is a formal insolvency trigger — not just a debt collection letter. You have 21 days to respond, and ignoring it gives the creditor the right to petition for your bankruptcy or the company's winding-up.

A statutory demand is a formal written demand under the Insolvency Act 1986 — for an individual, it is a prerequisite to a bankruptcy petition; for a company, it is evidence of inability to pay debts on which a winding-up petition can be based. You have 21 days from service to pay the debt in full, reach an arrangement with the creditor, or apply to the court to have the demand set aside. An application to set aside must be made within 18 days. Acting promptly — within hours of receiving a statutory demand — is critical. A solicitor will assess the grounds for set-aside and act immediately.

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Responding to a Statutory Demand

Statutory demands — what they are, the grounds for set-aside, and what happens if you do not respond.

The response to a statutory demand must be determined within days — the 18-day window for a set-aside application closes quickly. A solicitor will assess the grounds and act within the required time frame.

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What is a statutory demand and what triggers it?

A statutory demand is a formal written demand in a prescribed form — either Form 6.1 (individual) or a demand under section 123(1)(a) of the Insolvency Act 1986 (company). For individuals, it demands payment of a debt of £5,000 or more. For companies, it demands payment of a debt of £750 or more (the threshold applying during and following COVID moratoriums). If the demand is not complied with within 21 days — by payment, by a court-approved security, or by an arrangement — the creditor can present a bankruptcy or winding-up petition. The demand does not require a court order; any creditor can serve one. A solicitor will assess the demand on receipt and advise on the grounds and the deadline.

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Ground for set-aside: the debt is disputed

The most powerful ground for setting aside a statutory demand is that the debt is genuinely disputed — meaning the debtor has a real prospect of successfully contesting the claim at a civil trial. The dispute does not need to be certain to succeed — it must have a realistic prospect of success. Where the debtor has a counterclaim, a set-off, or a genuine factual dispute about whether the debt is owed, the court will set aside the statutory demand. The application must be made within 18 days of service, and the evidence supporting the dispute must be before the court at the hearing. A solicitor will assess the strength of the dispute and draft the application and supporting evidence urgently.

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Ground for set-aside: the creditor holds security

Where the creditor holds security for the debt — a charge over assets, a mortgage — the statutory demand can only be for the unsecured portion of the debt. A statutory demand that demands the full debt without giving credit for the value of the security is defective and can be set aside. A solicitor will assess whether the creditor is a secured creditor, whether the security has been valued, and whether the demand correctly reflects the unsecured balance — or whether the failure to account for security is a ground for a set-aside application.

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Ground for set-aside: a counterclaim equals or exceeds the demand

Where the debtor has a genuine counterclaim against the creditor — for breach of contract, professional negligence, or any other claim — and the counterclaim equals or exceeds the demand amount, the court will set aside the statutory demand. The counterclaim must be genuine and legally sustainable — a mere assertion is not enough, but a properly evidenced claim will provide a complete defence to the statutory demand. A solicitor will assess whether the counterclaim provides a ground for set-aside and draft the application accordingly.

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Negotiating a payment arrangement to avoid insolvency proceedings

Where the debt is genuine but the debtor has short-term cashflow difficulty, negotiating a payment arrangement with the creditor — structured to be completed or substantially performed within the 21-day period — may allow the demand to be withdrawn without a set-aside application. A solicitor will engage the creditor promptly, propose a realistic repayment plan, and document the arrangement in terms that the creditor will accept as satisfying the demand — including a binding consent that the creditor will not present a petition while the arrangement is maintained.

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What happens if you do nothing

Ignoring a statutory demand — allowing the 21-day period to expire without paying, reaching an arrangement, or applying to set it aside — creates a significant legal risk. For individuals, the creditor can immediately present a bankruptcy petition. For companies, the failure to comply within 3 weeks is deemed evidence that the company cannot pay its debts — enabling a winding-up petition. The consequences of a bankruptcy or winding-up petition are far more serious and more expensive to address than a timely set-aside application. A solicitor will ensure no deadline is missed and that the most effective response is in place before the 21 days expire.

How It Works

A statutory demand starts a countdown — 21 days to pay, arrange, or set aside. Acting within the first 24–48 hours gives you the most options.

A solicitor will assess the demand immediately — identifying whether it can be set aside, what the grounds are, and whether negotiating with the creditor is the more efficient route — and will act before the 18-day set-aside application window closes.

Submit Your Request
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Tell us about the demand — today

Describe the creditor, the amount demanded, whether you dispute the debt, and when you received the demand.

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Solicitor assesses the grounds

A debt and insolvency specialist assesses whether the demand can be set aside, whether a payment arrangement is more appropriate, and what action must be taken before the deadline.

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Free initial consultation

You receive urgent advice on the demand and what you must do next — at no cost and no obligation. Do not delay.

Act Today — Free Initial Consultation

The 21-day countdown on a statutory demand starts the moment it is served. Waiting costs options — a solicitor needs to act before the window closes.

Get specialist statutory demand advice today — and find out whether the demand can be set aside, the debt challenged, or an arrangement negotiated before the deadline.

Respond to My Statutory Demand

Common Questions

Statutory demands — what people ask us.

I received a statutory demand through the post. Has it been served?

Personal service — handing the demand directly to the individual — is the most effective form of service. However, postal service and substituted service (leaving the demand at the address or advertising it) can also be effective where personal service has been attempted and failed. A demand served through the post is generally considered served when it would have been received in the ordinary course of post. A solicitor will assess when service occurred, because the 21-day period runs from the date of effective service — and this affects the deadline for the set-aside application.

I have paid some of the debt but not all of it. Is the statutory demand still valid?

A statutory demand is only valid for the amount demanded on the date of service. If you have made payments reducing the balance below £5,000 (for individuals) or £750 (for companies) since the demand was served, the demand may no longer be sufficient to support a petition — the petition minimum thresholds still apply at the time of presentation. A solicitor will assess whether partial payment has brought the balance below the petition threshold and advise on the implications for any further enforcement action the creditor might pursue.

Can a statutory demand be served for a debt that is the subject of a court claim?

A statutory demand can be served for any undisputed debt — including a judgment debt. Where a court claim is pending and the debt is contested in those proceedings, a statutory demand for that disputed sum is an abuse of process and can be set aside. The courts have been clear that creditors cannot use the statutory demand procedure to leapfrog existing litigation on a disputed debt. A solicitor will advise on whether the statutory demand has been improperly served for a debt that is in active dispute — and will make the set-aside application on that basis.

I am a director of a company that has received a statutory demand. What must we do?

A company that receives a statutory demand has 21 days to respond. If no response is made, the company is deemed unable to pay its debts — and the creditor can present a winding-up petition without further notice. Directors should act immediately — assessing whether the debt is disputed, whether an arrangement can be reached, or whether the company needs the protection of an insolvency process (such as administration) to buy time. Directors must also be aware of their duty to creditors once insolvency is foreseeable — continuing to trade and incurring further debts may give rise to wrongful trading liability. A solicitor will advise on both the statutory demand response and the directors' duties position.

Can a creditor serve a statutory demand for a time-barred debt?

No — a debt that is statute-barred under the Limitation Act 1980 (typically 6 years from the date of the breach or the last payment or acknowledgment) cannot be enforced in proceedings. A statutory demand for a statute-barred debt is a ground for set-aside — the court will set aside the demand where the petition that would follow could not be sustained because the debt is unenforceable. A solicitor will assess when the cause of action arose, whether any payment or written acknowledgment restarted the limitation period, and whether the statute-barred defence is available on the specific facts.

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