In order to issue a Bankruptcy Petition against you, a creditor could serve you personally with a Statutory Demand. If a Statutory Demand is threatened or brought against you, you are strongly advised to seek immediate legal advice.
It is crucial that you act quickly when you receive a Statutory Demand if you are to avoid the creditor bankrupting you. You have only 18 days to apply to the Court once you have received a Statutory Demand.
In today’s testing economic climate creditors are increasingly resorting to Statutory Demands more quickly than ever before.
Often the use of Statutory Demands are inappropriate and in many cases we can apply to the Court to set aside the Statutory Demand if you are able to show that there is a genuine dispute on substantial grounds and has a real prospect of a Defence.
Alternatively, if you can show that you have a counterclaim, cross-demand or set-off that is equal to or exceeds the debt, this will prevent a creditor from taking any formal insolvency process against you.
Top tip: You should not ignore the Statutory Demand and seek legal advice about how bankruptcy would affect you immediately. Creditors may sometimes threaten you with bankruptcy where it's clearly inappropriate, for example, where you owe less than £5,000 or where sums due are disputed. This might be harassment and you can challenge it.