What is a statutory demand?


Published by a ³ÉÈËÓ°Òô Restructuring & Insolvency expert
Practice notes

What is a statutory demand?


Published by a ³ÉÈËÓ°Òô Restructuring & Insolvency expert

Practice notes
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This Practice Note looks at what a Statutory demand is and what it seeks to achieve in both corporate and personal Insolvency. It assumes that the Debtor is based in England and Wales.

The statutory demand—the general position

A statutory demand (in both corporate and personal insolvency) is a demand for a debt—either payable now, or payable at some future date—which is served on the debtor by one or more of their creditors. In both corporate and personal insolvency, failure by the debtor to pay the debt within 21 days of service of the statutory demand, satisfy/secure it to the creditor's satisfaction, or take the appropriate steps to prevent the creditor from acting further on it, will create a presumption of insolvency (on an inability to pay basis) of the debtor. Where the debtor is an individual, an unsatisfied statutory demand provides a creditor with one of only two grounds upon which a creditor's bankruptcy petition may be issued—or 'presented'—against an individual.

Although a statutory demand should contain the prescribed matters set out in the relevant parts

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Jurisdiction(s):
United Kingdom
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Key definition:
Statutory demand definition
What does Statutory demand mean?

A formal document demanding payment of a debt, the service of which is the most common precursor to the presentation of a bankruptcy petition.

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