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BusinessA Guide to Challenging a Statutory Demand: Legal Insights and Procedures

A Guide to Challenging a Statutory Demand: Legal Insights and Procedures

A Statutory Demand, as dictated by the Insolvency Act 1986, functions as a formal demand for debt repayment and is a critical legal tool for creditors to procure payments from debtors, including both individuals and companies.

Debtors who have reservations about the validity of a Statutory Demand can legally seek to have it set aside. Here’s an outline for effectively challenging a Statutory Demand:

  1. Seeking Legal Expertise: The first and foremost step for a debtor is to consult a solicitor specialising in insolvency and debt issues. This professional advice is critical for understanding the unique aspects of the case and determining the most effective legal strategy.
  2. Reasons for Setting Aside a Statutory Demand: A debtor should be aware of the specific reasons that justify challenging a Statutory Demand. Common reasons include:
    • Dispute over the debt’s validity.
    • The debt amount being below the statutory threshold.
    • Mistakes in the demand’s structure or content.
    • The debtor possessing a counterclaim, set-off, or cross-demand that is equal to or more than the debt.
  3. Essential Forms for the Process in England and Wales:
    • Form 6.4 (Rule 6.4(1)): The application form to challenge the statutory demand.
    • Form 6.5 (Rule 6.4(2)): This form is for providing evidence and details supporting the challenge.
    • Form 6.6 (Rule 6.4(3)): Used if the debtor also wants an injunction to stop the creditor from filing a bankruptcy petition.

These forms should be filled out accurately and submitted to the court, which will then set a date for a hearing to deliberate on the application. Correctly following the procedure and supplying all required evidence and information is vital for the application’s success.

Expert Commercial Law’s Support in Debt Recovery

Expert Commercial Law, through its panel of solicitors, offers guidance and assistance to parties involved in setting aside Statutory Demands. Not being a solicitors’ firm ourselves, we connect clients with our panel of commercial law solicitors for formal legal advice or practical case support. Our panel is also adept in dealing with other commercial legal issues like business energy claimsshareholder disputes and contract disputes.

Sam Allcock
Sam Allcock
With over 20 years of experience in the field SEO and digital marketing, Sam Allcock is a highly regarded entrepreneur. He is based in Cheshire but has an interest in all things going on in the North West and enjoys contributing local news to the site.
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