4. Challenge a statutory demand
If you don’t agree with a statutory demand you’ve been given, you can apply to challenge it and get it ‘set aside’.
You can be made bankrupt or your company wound up if you ignore a statutory demand.
You must apply to the court named on your statutory demand. Contact a solicitor or your nearest county court if you’re not sure where to send your application.
You can’t challenge a statutory demand if it was served on a company. You can apply to stop your creditors from winding up your company instead.
Any bankruptcy petitions the creditor has already filed against you will usually be suspended until the court reaches a decision.
The court won’t usually set aside a statutory demand if it was served on you following the judgment of another court unless, for example:
- you think the creditor owes you the same amount as your debt, or more
- the amount on the statutory demand is secured
You must apply to challenge the statutory demand within either:
- 18 days if you were in the UK when you got the statutory demand
- 21 to 34 days if you were in another country when you got the statutory demand - check the table of countries for specific deadlines
If the deadline is during a weekend or on a bank holiday, you have until the next day the court is open to apply.
You might be able to get an extension in some circumstances - contact the court to find out what these are.
How to apply
Download and fill in form IAA.
Make 3 copies of the completed form and either post them to the court named on your statutory demand or give them to the court in person.
What happens next
You’ll usually hear back from the court within 10 working days of applying.
If the court doesn’t agree with your application, it can give the creditor permission to issue a bankruptcy petition against you.
If the court agrees with your application, your case will be passed on to a bankruptcy registrar. They’ll look at your case and arrange a hearing.
What happens at the hearing
Both sides will present their case to a registrar or judge. They’ll either make a decision then, or ask you and the other party to give more evidence at another hearing.
You’ll usually get a decision at the end of the final hearing.
If you win your case, you’ll get an order from the court setting aside the statutory demand. The deadline for paying the debt will be suspended.
If you lose, you’ll have to pay back your debt within the 21 day time limit. The creditor can apply to bankrupt you if you don’t pay in time and your debt is £5,000 or more.