If your business has been issued with a statutory demand, this is a serious matter which can lead to your business being wound up (made insolvent). It is therefore vital that you act quickly in order to protect your business from these outcomes.
To discuss your circumstances or find out more about the right way to defend a statutory demand, get in touch with our expert defendant debt recovery lawyers today for high-quality advice and legal support. Call us on 0151 659 1070 or complete our online enquiry form.
Statutory demands: what can happen
A statutory demand will give your business 21 days to pay an overdue debt in full or otherwise come to an arrangement with your creditor for repayment of the debt. If this doesn't happen, your failure to do this can be used as evidence that your business is insolvent and your creditor can apply to have your business wound up. However, they can only do this if the total amount of debt you owe to your creditor is over £750.
Defending a statutory demand - your options
There are numerous options for dealing with a statutory demand, and your business should seek legal advice to understand which are most viable in your particular situation. However, the actions you may be able to take include:
Applying to have the demand cancelled
You can apply to Court for the demand to be cancelled within 18 days of it being served on your business. You can do this for any of the below reasons:
- The amount or existence of the debt is in genuine dispute
- You have a counterclaim against your creditor which is worth just as much or more than the debt they are claiming from your business.
- The demand has been issued incorrectly.
- There are also several legal defences open to you, such as that there are other ways for the creditor to recover the money, or that it would be unduly harsh for your business to be wound up. These defences can be quite technical, so make sure you receive qualified legal advice before using them.
Come to an agreement with your creditors
You may, for instance, be able to offer security on your property or agree to pay by instalments.
Reduce the debt to below £750
Your business cannot be wound up if the debt you owe is below £750. You could, therefore, consider making a payment on your business's debt, which brings the total amount below this threshold, thus protecting the business from being wound up.
Contact our Commercial Debt Recovery Solicitors
Whether you have been issued with a statutory demand or defending one, our expert team of commercial debt recovery lawyers can help you to defend your business. To discuss your circumstances get in touch with us today. Call us on 0151 659 1070 or complete our online enquiry form and we will get back to you without delay.