About this blog

Accessible legal tips, know-how and news for anyone with a complaint or legal issue from Stephen Gold, author of The Return of Breaking Law, the book

Thursday 23 November 2017

Statutory Demands: New Rules

You may only be interested in this if you are a lawyer doing insolvency work or a debtor trying to prevent your creditor from making you bankrupt (and remember that no creditor can now do this unless the amount of the debt is at least £5000 although you can apply for your own bankruptcy owing less).

Bankruptcy proceedings cannot generally be launched unless the creditor has previously brought a form called a statutory demand to the debtor's attention. That must allow the debtor 21 days to pay up after which a bankruptcy petition can be issued and 18 days to apply to the court to set it aside because, for example, the debt is disputed or the debtor has a cross-claim against the creditor. 

On 8 December 2017 the procedural rules dealing with statutory demands are amended by the swingingly entitled Insolvency (England and Wales) and Insolvency (Scotland) (Miscellaneous and Consequential Amendments) Regulations 2017 SI2017/1115. They say that the court can refuse to issue a bankruptcy  petition if it is not satisfied that the creditor has discharged their obligation to do all that is reasonable to bring the demand to the debtor's attention. Personally handing the demand to the debtor is the usual and best way of satisfying the obligation but very, very, very, very occasionally  (I don't think) that is not possible because the debtor just happens to be hiding away from their creditor. 

The other statuary demand changes require the periods shown on the demand for paying up and applying to set aside to be extended when the demand is being served outside England and Wales. If this is not done, the demand could be invalid.

There's plenty on bankruptcy - avoiding it, pursuing it and coping with it - in my book Breaking Law.