Setting aside a statutory demand

Application to set aside a statutory demand

If you have been served with a statutory demand whether you are an individual or a company the worst thing you can do is to ignore it. You will have 18 days after receipt of the demand to apply to have it set aside and, as detailed below, before applying to court, you should formally demand that it gets withdrawn by the other party and only apply to court if that doesn’t work.

We regularly advise clients who have been served with a statutory demand and want to challenge it and potentially may need to apply to set aside the demand. If you need lawyers, please do get in contact with us.

Grounds to set aside a statutory demand

There are 2 basic legal  grounds on which you may be able to have the demand set aside. these are :

Debt is disputed

This will not be available if you already have a judgment for the debt against you because that judgment effectively means the debt is no longer disputed.

However, in many cases, a statutory demand will be served before a court claim has been started. This is generally an abuse of the statutory demand process. If you have to apply to set aside the demand you will need to demonstrate that the debt is genuinely disputed but in many cases, if a suitable letter is written to the other party stating the debt is disputed, the basis for this and that the demand should be withdrawn, the demand does get withdrawn.

Another possible scenario is that part of the debt is undisputed but part is disputed  (this might include where there is no dispute about the debt owed but that there are contractual grounds for counterclaiming or a set off) or that the amount stated in the demand as owing is incorrectly calculated or there is some other defect in terms of the correct party. If the demand is incorrect in any respect, it should be withdrawn.

This is primarily because of the risk of a costs order if you do successfully apply to set aside the demand.

Invalid service of the statutory demand

This applies where you did not receive the demand at all or only very belatedly and service was invalid. In this case, the outcome would likely be that the creditor will just start again.

In some cases  you may only become aware of the demand if you get served with a Bankruptcy or Winding Up petition.

It is important not to play games with service of statutory demands. Some debtors deliberately seek to avoid or deny service. This may work in the short term and buy some time but ultimately will likely prove counterproductive and at some point different methods of deemed service are likely to apply.

Solicitors for applying to set aside a statutory demand

Our specialist, experienced litigation solicitors can help if you have been served with a  statutory demand. Please do get in contact by phone or email.