Received a Statutory Demand

rhowes2000

Hi all,

Please would anybody to help me with this. Today I received a hand delivered Statutory Demand (I wasn't in at the time). It was from Connaught Collections, on behalf of 1st Credit assigned by HSBC. This is literally the first communication I have received since around 1999 which is when the last payment was made. Over the last few years I have written to HSBC on several occasions asking to set up a payment plan or to have part of the debt written off etc. What is the best way to respond to this please?

rog2

A statutory demand is a very legal document, and is normally the last step before a creditor applies for your bankruptcy. Normally it should be personally served on you. You would, under the terms of the statutory demand, have a set period (I believe it is 18 days) in which to contact the creditor and try to negociate, otherwise the case is referred to the high court.
If this is, indeed, the document which you have received then I suggest that you get some legal advice (Solicitor or CAB) urgently.
On the other hand, some DCAs use letters made out to look like official documents - in flagrant contravention of OFT guidelines. Please check to make sure it is the legal document.

rhowes2000

Thanks rog2. I've had a look around on the internet and as far as I can see it is genuine. I'm not disputing the debt but I think it is harsh in the fact they have not responded to me in the past and this is the first communication I have received from them for seven years. It does mention getting in touch to discuss repaying the debt which I can do in installments, is this worthwhile?

rhowes2000

Also, just noticed something else. It is dated 06/09/06 yet it was hand delivered today, so i'm left with 4 days not 18. Great.

rog2

rhowes2000 wrote:

Also, just noticed something else. It is dated 06/09/06 yet it was hand delivered today, so i'm left with 4 days not 18. Great.

I think it is 18 days from date of service.

rhowes2000

Thanks again rog2

file_wizzard

rog2 wrote:

I think it is 18 days from date of service.

You will have 18 days from the date of service.

However in your case if the last contact or admission was over 6 years ago the debt will now be statute barred.

If it is not over 6 years since the last acknowledgement or admission then you will need to do one of the following ;

1) Apply to the court to set aside the demand as you contest it, suitable reasons may you disagree with be the amount claimed, or that the debt is unsubstantiated
2) Contact the creditor and arrange payment
3) Do nothing, the creditor will then have to petition for your bankruptcy.

3 is normally very unlikely ( but not impossible) as it will cost the creditor somewhere in the region of £1000 - £1500 to do this, so they need to be very sure that they can recover this from the BR, if they do petition and it is an unsecured loan then they will not get preferential treatment over and above any other creditor who may be included in the BR, so in real terms they have little to gain from the process if you have limited assets.

Also, although this could be ( and most likely is) an empty threat to get your attention, please don’t underestimate the potential significance of this action, you should seek independent legal advice as a matter of urgency, CAB or free half hour with a local solicitor would be a good start.

sgx.saint

Just to resurect this thread from the depths of MSE.

I thought that you cannot be made bankrupt before going down the CCJ route?

file_wizzard

sgx.saint wrote:

Just to resurect this thread from the depths of MSE.

I thought that you cannot be made bankrupt before going down the CCJ route?

A statutory demand can be issued without the need for a Prior CCJ, the process its self is one of those wonderfully antiquated quirks of old English law, and it is a VERY powerful process which requires the absolute minimum of input from the claimant.

It is however somewhat costly to actually petition for the bankruptcy, and an unsecured lender would have very little to gain from the process as they would receive no preferential treatment over and above any other creditor that would be included in the bankruptcy, for this reason they are often sent as threat / scare tactics, However you should never dismiss or ignore a statutory demand, and I would strongly recommend that in most cases you apply for a set aside to at least give you some breathing space to calculate you next move.

sgx.saint

Ah, learn something new everyday!!

Luckily I have never received one of these. I am on a self managed DMP, so it is good to know what this is incase I ever do receive one.

Is their anyway to defend against it? I intend to pay back my debt, and I never ever want to go bankrupt.

Surely if your paying all that you can to your creditors and you have no assets then this route is a stupid one to follow and surely a court would see this?

file_wizzard

sgx.saint wrote:

Surely if your paying all that you can to your creditors and you have no assets then this route is a stupid one to follow and surely a court would see this?

Indeed, it would cost the petitioning creditor anywhere between £1000 - £1500 to petition, and if you have limited assets they would only get their equal share along with any other creditors you may have.

so as you can see in the real world it makes no sense for them to do this.

The court would consider your ability to pay, and any assets, therefore if you can demonstrate that you have minimal assets, and that the effect of a BR order would be disproportionate for you and your family it is very unlikely a judge would award in their favour.