One of the debt recovery options available to you, if you are owed money by an individual or a company, is to introduce the threat of bankruptcy or liquidation as a form of leverage to get them to pay.
Here at Bowsers Solicitors, it is our aim to find the most efficient way of helping you to recover a debt and one of the options that we might suggest is to issue a statutory demand.
What Is A Statutory Demand?
This document is a formal and written warning to a debtor that you are serious about getting your money back and are prepared to go to whatever lengths are necessary to achieve that aim.
Basically, a statutory demand can be viewed as a precursor to bankruptcy or liquidation.
Obviously, you don’t want a person to be made bankrupt, or a company to go into liquidation, as a result of issuing this demand as you may not get your money back if that happens.
Many of our clients who use a statutory demand to put the right amount of pressure on a debtor to get paid are not actually intending to go through with the threat of bankrupting a person or liquidating a company, as that would be expensive.
However, if a debtor is not responding to the usual court process and you feel that they have the means to pay your debt if suitable pressure is applied, a statutory demand can be viewed as a great tool to achieve that aim.
A statutory demand can be used to claim money from anyone who owes money, as long as the debt is not older than six years.
How Does It Work?
In simple terms, a statutory demand is a formal demand for payment that is served on a debtor.
Once they receive the document, they are given a 21-day period in which to respond to the claim and either make arrangements to pay or dispute the claim.
If you are issuing a statutory demand, it is often the case that you are doing so because the debtor is not responding to other collection methods rather than trying to get a disputed debt resolved.
Our debt recovery team can make all the arrangements necessary to raise the statutory demand and get the document served on the debtor. We will also talk to you about your options and the potential risk attached to issuing this document.
The statutory demand will be advertised and that means other creditors will be made aware of your actions. Again, this could help apply the right amount of pressure needed to get someone to pay.
A statutory demand is not without its risks, but it is a debt recovery option well worth considering in the right circumstances.
Please see our debt recovery enforcement methods guide for more information about your options, or talk to us about how we can help find the right way to get your debt paid.
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