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04 July 2023

Dispute Resolution guides: Statutory demands, winding up petitions, and bankruptcy

3 mins

We have a range of Dispute Resolution Guidance Documents available to assist both individuals and organisations through procedures they may be facing for the first time. We take a look at a selection of topics covered in our documents below.

Statutory demands

A statutory demand is a formal written document from an individual or company to an individual or company, demanding payment of an outstanding debt from that individual or company within 21 days. They are not Court documents, and so you do not need to issue Court proceedings to serve a statutory demand on a debtor. Similarly, there is no Court fee to pay to issue a statutory demand.

Setting aside a statutory demand

If an individual receives a statutory demand and they dispute the debt or part of the debt, so as to reduced the undisputed amount to below £5,000, the individual should, within 18 days of being served with the statutory demand, issue an application to have the statutory demand set aside. There is no Court fee to pay for this.

Winding up petitions

If a company has failed to respond to a statutory demand or failed to pay the sum it owes to the creditor as set out in the statutory demand, the creditor will be in a position to issue a winding up petition against that company.

Application for an injunction to prevent the presentation or advertisement of a winding up petition

If a company owes a debt to a creditor, and that debt is disputed, the debtor may seek to issue an application for an injunction to restrain the presentation or advertisement of a winding up petition. Once a winding up petition is issued by the Court, it can have devastating effects on a company, and its therefore very important to a company that the winding up petition is not even issued, but as a minimum, not advertised.

Making a person bankrupt and bankruptcy petitions

There are generally two main ways in which a person can be declared bankrupt by a Court. Firstly, the individual themselves, if they are unable to pay their own debts as and when they fall due, can petition for their own bankruptcy. Secondly, and more commonly, is where a person or company to whom the individual owes money (i.e. a creditor), petitions the Court to make that individual bankrupt.

We discuss each of these issues, how to address them, and the processes involved, in the relevant Dispute Resolution Guidance Document, produced by our team of experts. Please complete the form below to select the documents you would like to receive, and these will be sent to you by email when your request has been processed.

To view the full range of Guidance Documents available, visit our web page here.

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