A statutory demand is a special type of written request from a creditor (someone who is owed money) for payment of a debt.
The person or company that receives the demand has 21 days to settle the debt or 18 days to ask the court to set aside (dismiss) the demand.
The creditor may present a petition to court for a:
- bankruptcy order if after 21 days, a statutory demand claiming the debt which is equal to or exceeds £750; or
- winding-up order if, after 21 days, a statutory demand claiming the debt exceeds £750 is not:
- secured (an agreement reached for payment), or
- set aside
There is no expiry period for a statutory demand. However, under the Limitation Act 1980, a debt must not be more than 6 years old or based on a default judgment more than 6 years old. This period can start to run again from any date the debtor agrees the debt exists and may be extended more than once. You may need legal advice if you think the debt is affected by this time limit.