I have received a statutory demand. What do I do?

Short answer

A statutory demand is a formal notice that gives you 21 days to pay a debt of £5,000 or more or apply to court to have it set aside. If you do not respond, the creditor can present a bankruptcy petition against you. Act immediately — you only have 18 days to apply to court.

A disputed debt or a statute-barred debt (more than 6 years old, with no payment or written acknowledgment) is a good ground to have the statutory demand set aside.

1 The rule

Statutory demands for individuals are governed by the Insolvency Act 1986 and the Insolvency Rules 2016. A failure to comply with a statutory demand for more than 21 days creates a presumption of inability to pay debts, entitling the creditor to present a bankruptcy petition.

The statutory demand itself is not a court document — it does not need to be sealed by the court. A creditor can serve it without any prior court involvement.

2 What you can do now

1. 1
   Read the demand carefully and note the date of service

   The 18-day clock to apply for set-aside runs from the date you were served (in person) or from the fourth day after posting (if served by post). Identify: the creditor's name, the amount claimed, and the grounds stated. Check whether it is Form SD1 (unsatisfied court judgment) or Form SD2 (other debt).

2. 2
   Assess whether you dispute the debt

   Do you genuinely owe this money? Is there a dispute about the amount, the contract, whether services were delivered? Is the debt statute-barred (more than six years since last payment and no written acknowledgment)? Is there a cross-claim or set-off that would reduce or eliminate the debt? If yes to any of these, you should apply to set aside the demand.

3. 3
   Apply to set aside (if grounds exist)

   Complete Form IAA (Insolvency Application). File it at the court specified on the statutory demand (usually the Insolvency and Companies Court or your local county court). You must file within 18 days to ensure the hearing is before the 21-day period expires. Include a witness statement setting out your grounds and exhibiting the statutory demand. The court fee is £155 (2026 rates).

4. 4
   Negotiate if the debt is valid

   If you owe the money and cannot pay in full, contact the creditor immediately. Creditors who serve statutory demands usually prefer payment to bankruptcy proceedings (which are costly and often recover little). Offer a realistic repayment schedule. Get any agreement in writing. A DMP or IVA may be appropriate if the debt forms part of larger financial difficulties — see the <a href="/guides/debt/debt-management-plan" class="body-link">debt management plan guide</a>.

5. 5
   Take legal advice if uncertain

   If you are unsure whether you have grounds to set aside, or if the debt is large, consult a solicitor or a free debt advice service immediately. <a href="https://www.stepchange.org/" target="_blank" rel="noopener noreferrer">StepChange</a>, <a href="https://www.nationaldebtline.org/" target="_blank" rel="noopener noreferrer">National Debtline</a>, and <a href="https://www.citizensadvice.org.uk/" target="_blank" rel="noopener noreferrer">Citizens Advice</a> all provide free, immediate advice on statutory demands. The stakes are high — bankruptcy has severe consequences for your home, credit, and employment.

3 When this does not apply

• A statutory demand based on a debt that is genuinely disputed on substantial grounds must be set aside — the court has no discretion once you establish a genuine dispute.
• A debt that is statute-barred (more than 6 years old with no acknowledgment or part-payment) is not recoverable — this is a complete defence to a bankruptcy petition.
• A statutory demand served on a company (not an individual) requires a minimum debt of £750 and is governed by the Companies Act 2006 winding-up procedure.

4 Common questions