Statutory Demand Process

[businessadvicepls]

Hi everyone,

Can anyone advise what the correct procedure for issuing a statutory demand is.

It's for £3k but no other means of collection/reminders have been issued/used before the SD issued.

Cheers all.

 

[Kernowman]

Click on this link below which takes to a government page that gives advice on how to make an SD

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/ManagingDebt/CourtClaimsAndBankruptcy/DG_187711

 

[businessadvicepls]

Thanks for your response.

I am looking for advice as to whether someone who issues a SD needs to follow any process first, ie sending reminders, demand letters.

Can a debt for £3k that is only 8 weeks old warrant having a SD served on it with no other means of negotiation or request for payment as a first point of call?

 

[Kernowman]

I think it would be most unwise to apply for an SD without attempting to try the conventional recovery route first, although the application form makes no mention of you providing substantive evidence that you have done so. There is a section where you can state your case though and this is where you should list your previous attempts at recovery.

It probably makes the assumption that you have already done so and previous repeated attempts at recovery have failed, or the debtor has made no contact in response to your correspondence, or has not demonstrated any inclination to pay the debt, either in full or by instalments.

If there is a dispute over the debt, the debtor can ask to have the action set aside while the dispute is being investigated.

 

[businessadvicepls]

Thanks again.

This is an SD that has already been issued with no attempt apart from one telephone call - (which has taken 2 weeks to be picked up on!) has been made to collect the debt, nothing has been put in writing nor has it been requested by any formal means first.

Am asking for a relative who has a business but it has been served on him personally as he had a personal guarantee on the agreement.

Just seems a little excessive that the persons owed would go straight for such extreme routes without any form of negotiating first off!

I appreciate that an SD is normally an excellent scare tatic in getting monies owed but he is totally unable to pay in full within the 18 days set out and no means of getting any legal advice as he firstly cant afford it and has been passed from pillar to post with all the advice lines (and i mean everyone, CAB, Business Debt Line, Legal Aid.. everyone!) Looks like he's out on his own to respond but any advice would be greatly appreciated!

 

[Kernowman]

It is indeed often used as a scare tactic and few would risk letting the process go through to completion, hence it is a powerful threat. It is all too often used as a "vengeance weapon" from someone who has a personal axe to grind, rather than a rational person who has used accepted practice to recover the debt.

I would first establish with your relative whether they are actually liable for the debt personally. If there is a dispute over the debt, then you can ask to have it set aside - there is a section on the form which was served for you to do that and it MUST be done.

If your relative does indeed owe the money, then they can apply to defer the settlement until a later date or offer to pay by instalments.

If you don't challenge it even if you believe it is unwarranted, then by default the creditor can apply to have a winding up order served on the company, or a personal bankruptcy petition served. Inactivity is NOT an option.

 

[businessadvicepls]

with my understanding of the situation, he is liable. I understand that it is being served for a property lease (a rental payment) but he guaranteed it personally with a further gurantor (my aunt!) also. The SD has been issued against both parties - hence my concern as my aunt is far too old to be worried about this sort of thing and doesnt need to be worried about the threat of bankruptcy whilst drawing her pension.

As I say he is able to make an offer of payment albeit a small amount each month he is hoping for a lump sum to come in literally in a few weeks times and is hoping to clear the balance in full.

 

[Kernowman]

In your response to the SD then, you should set out your repayment proposal and send it off forthwith. Add to the statement that the SD was the first instance of the debt being claimed for repayment and that you had no prior notice the creditor was seeking repayment of the debt.

 

[akirk]

We went down this process a while back (issuing a SD against someone else) and I am pretty sure there was something in the blurb about having to show that other attempts have been made first, a statutory demand is useless on it's own except as the precursor to a winding up order / bankruptcy process at which point it hits the court. Any judge who sees that no other attempt has been made to get the monies, and that the monies are being offered through structured repayment is likely to be not impressed! I would have thought small claims court to be more normal for this - even there it is necessary to show evidence of attempts to get the monies in...

Alasdair

 

[Steve Thornbury]

A SD is a fairly heavy hammer to crack a nut at this stage. Is it REALLY the last resort? Maybe we should talk?

 

[businessadvicepls]

Hi Steve,

thanks for the message
Sorry you may have misunderstood - this has already been issued by another party against a relative.

he's done a lot more talking to people today and they are all saying that they are being very unreasonable and very heavy handed in dealing with it.

Lets hope they accept the proposal made