Serve a Statutory Demand to Someone That Owes You Money
Have you ever been kind enough to lend someone money, and then had them continuously brush you off or refuse to pay you back? Perhaps you are a freelancer or own a small business. Have you had clients and customers try to avoid paying you for goods that have already been delivered or services you’ve already completely? If so, you’re likely to feel a sense of injustice if there is no good reason for withholding of payment. You may want to consider serving a statutory demand against the person that owes you money – it’s an affordable way of recovering what you are owed.
What is a Statutory Demand?
A statutory demand can be made by anyone who is owed money by an individual or company, as long as the debt wasn’t incurred more than six years ago. You don’t even need a lawyer’s help to file one, but using a fixed fee process server to provide proof of service for the statutory demand is recommended.
What Kind of Statutory Demand?
There are several different kinds of statutory demand forms, and you’ll need to pick the correct one for your situation. If you are in England or Wales and are owed money from an individual, there are three kinds of forms.
- The first is for debts that need to be paid immediately.
- The second are for debts that are immediately payable following a judgement or court order.
- The third is for when you know that the debtor will not be able to pay immediately. This form states that you are requiring the debtor to pay you in the future.
- If you are owed money from a limited company, there is a different form that you must fill out.
- Finally, residents of Scotland must fill out a separate form in order to make a statutory demand.
How Do You Serve a Statutory Demand?
Once you have filled out the appropriate form, you’ll need to serve it to the debtor. If that person is avoiding you or you haven’t had recent contact with them, this can be tough. You may want to enlist the help of a process server. A process server will be able to track down your debtor, and see that they are properly served you statutory demand. Many UK laws governing how legal documents can be served exist, and if you aren’t familiar with those laws, you risk breaking them. Failure to properly and legally serve a demand can mean that your debtor may be able to continue to avoid paying, without legal reprimand.
What Happens if a Debtor Ignores a Statutory Demand or Fails to Pay?
Once a statutory demand is served, the recipient has 21 days to either pay the debt or respond to the demand. If they do not do either within that 21 days, you will then be able to take further legal action. If an individual owes you more than £5,000, you can actually start bankruptcy proceedings against them. If a company owes you more than £750, you can file to ‘wind up’ that company. After the 21 day deadline passes, you have four months to either begin bankruptcy proceedings or file to ‘wind up’ a company. If you wait longer, you’ll have to provide an explanation for your delayed response to the courts.
Writer’s Bio: Lewis Murawski is the marketing and business development manager at Diem Legal and Managing Director of Kahootz Media. Need professional help with digital marketing? You can connect with Lewis directly on LinkedIn