If you do not repay your debts on time, your creditor may use the power of the courts to get you to settle the debt or start making reasonable payments.

A creditor has the option to try to bankrupt you, with a statutory demand being the first step of that process.

A Statutory Demand requires you to settle the outstanding debt by either:-

• Pay monthly/weekly payments
• A lump sum
• Secure it against a property or other assets.

Within 18 days is receiving a Statuary Demand, you may apply to your local County Court to set it aside under the following circumstances:

• The amount of money owed is in dispute
• The debt is not payable now.
• You are perpared to secure the debt to the creditors satisfaction under the creditors stated terms.
• The amount owed is less than £750.
• The statutory demand has been issued in error or does not comply with rules.
• You can and are about to repay the debt.
• You have a counterclaim of more than the money owed.

Ignoring or Failing to comply to a Statutory Demand entitles the creditor to present a petition for bankruptcy 21 days from the date of issue.

Some companies use statutory demands as a scare tactic. They know that when someone is unable to repay a debt, they generally have more than one debt, and that whomever shouts loudest tends to get paid first. However, you should always take a Statutory Demand seriously.

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