Navigating the Complexities of a Statutory Demand: A Comprehensive Guide

A Statutory Demand, under the Insolvency Act 1986, serves as a formal call for debt payment and is a key element in the legal process used by creditors to secure dues from debtors, be they individuals or companies.

For debtors who believe a Statutory Demand they’ve received is flawed or unjust, setting it aside is a viable legal recourse. Here’s an overview of how to dispute such a demand effectively:

  1. Seek Expert Legal Advice: The initial step for any debtor is to consult with a solicitor experienced in insolvency and debt-related issues. This professional guidance is crucial for understanding the nuances of the situation and determining the most appropriate course of action.
  2. Grounds for Setting Aside: The debtor must be aware of the valid reasons for challenging a Statutory Demand. Common justifications include:
    • Contesting the validity of the debt.
    • The debt amount being below the statutory threshold.
    • Errors in the demand’s form or content.
    • The presence of a counterclaim, set-off, or cross-demand that is equivalent to or exceeds the debt amount.
  3. Necessary Forms for Setting Aside a Statutory Demand in England and Wales:
    • Form 6.4 (Rule 6.4(1)): This form is for applying to set aside the demand, stating the reasons for the challenge.
    • Form 6.5 (Rule 6.4(2)): This form is for submitting supporting evidence and details for the application.
    • Form 6.6 (Rule 6.4(3)): This form is applicable if the debtor seeks an injunction to prevent the creditor from initiating a bankruptcy petition.

These forms must be accurately completed and submitted to the court, which will then arrange a hearing to consider the application. Adhering to the correct procedures and providing comprehensive evidence are crucial for a successful challenge.

How Expert Commercial Law Can Assist in Debt Recovery Actions

Expert Commercial Law, while not a law firm itself, offers access to a panel of solicitors specialising in commercial law. If you’re dealing with a commercial law case, such as setting aside a Statutory Demand, our panel of experienced solicitors can offer legal advice and cost-effective support. In addition to this, our panel is well-versed in handling business-related legal issues like business energy claimsshareholder disputes and contract disputes.

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