Statutory Demand question

tiger5000

Hi,
I've received a Statutory Demand from a creditors solicitor - and I've got some questions. First, some details...
They're claiming in the region of £70,000!!! I obviously can't afford to pay it as I have no assets, and I'm on a low income. There isn't anything to sell, and there are plenty of banks ahead of this particular creditor when it comes to distributing my non-existant assets.
To be honest, if they went through with their petition, it'd be doing me a favour because I'm up to my neck in debt as it is.
I understand that I'd be discharged in about a year, and debt free - which will be a huge relief.
However, I think I'm just about coping with my current debts, but this extortionate demand is the straw that will break the camels back - bit of a shame its come to this given that they've known all along that I can't pay them.
I've read on the internet that they don't always go through with a petition, and that the Statutory Demand is used as a scare tactic. Unfortunately, I suspect they'll go through with it as its been obvious to them for ages that I can't pay it. The Demand is usually issued, I believe, to prove to the court that the debtor can't pay the demand. It talks about complying with the demand by going to the court within 18 days to secure or compound the debt. What does this mean?

Richard_S

tiger5000 wrote: »

Hi,
I've received a Statutory Demand from a creditors solicitor - and I've got some questions. First, some details...
They're claiming in the region of £70,000!!! I obviously can't afford to pay it as I have no assets, and I'm on a low income. There isn't anything to sell, and there are plenty of banks ahead of this particular creditor when it comes to distributing my non-existant assets.
To be honest, if they went through with their petition, it'd be doing me a favour because I'm up to my neck in debt as it is.
I understand that I'd be discharged in about a year, and debt free - which will be a huge relief.
However, I think I'm just about coping with my current debts, but this extortionate demand is the straw that will break the camels back - bit of a shame its come to this given that they've known all along that I can't pay them.
I've read on the internet that they don't always go through with a petition, and that the Statutory Demand is used as a scare tactic. Unfortunately, I suspect they'll go through with it as its been obvious to them for ages that I can't pay it. The Demand is usually issued, I believe, to prove to the court that the debtor can't pay the demand. It talks about complying with the demand by going to the court within 18 days to secure or compound the debt. What does this mean?

Hi Tiger,

A Statutory Demand is issued by a Court so if it's come from a solicitor then it would appear to be a scare tactic, and if as you say they know you won't be able to pay it then why would they waste the money of legal fees and Court costs?

If it does turn out to be a legitimate S.D then you have that period of time to try and reach agreement with your creditor or if you can't then attend Court on the due date and present your proposals to the Judge.

Please keep us informed as to what happens.

Best regards

Richard

Richard_S

blind-as-a-bat wrote: »

I may be wrong here but if its issued by the court it would have the courts stamp on it if not then i agree it sound like a scare tactic

It would Bart, the OP says it's from a solicitor and doesn't mention a Court though.

tiger5000

Thanks for your input, guys.
But what does the "security" and "compound" bit really mean?
I am also interested to read that if I were to reply to their letter, this proves that it has been served (even though it arrived in the post?), and they then seem to be able to act upon it. I have actually drafted a letter, but I might just hang on to it until they get around to actually serving the Demand on me. It might, after all, never happen.
I am also curious, probably just clutching at straws, about something:
If I actually owed this money to a lender, I would assume that they'd be under an obligation to lend the money responsibly. This being the case, would there be an argument that they hadn't lent it responsibly, and so their petition effectively overturned? Would my situation not be the same? What they're chasing me for is an amount I've always claimed that I couldn't pay. This being the case, haven't they acted irresponsiblly, and/or been ill advised to pursue it??

rog2

Hi Tiger - I was declared bankrupt as the result of having a Statutory Demand issued against me by a creditor - in my case HMRC.
The Statutory Demand was issued as a result of defaulting on a Court Order, but it was not issued by the court - it was issued directly by HMRC, who served the demand in person.
Basically the statutory demand is the final stage before bankruptcy and you have 18 days to either pay, or negociate payment terms, with the creditor.
The statutory demand MUST be personally served - if you are not at home, then the server should leave a note stating when they intend to return. If you are not at home the second time they call, then they can 'deem' the statutory demand as 'served' by posting it through your letterbox.
At the end of the 18 days, then the creditor has the right to petition for your bankruptcy. I say that they have the right to do so, as not every creditor will automatically petition for your bankruptcy - often they use a statutory demand as a 'last ditch' attempt to get you to agree payment terms.
If the creditor does pursue with petitioning for your bankruptcy, then they must pay the 'up-front' court fees, which will be far in excess of the standard bankruptcy fees (in my case they were almost £1,800.00).
The creditor will not gain preferential status, by petitioning for your bankruptcy - he will have to take his place in the queue with all other creditors - and may actually end up out of pocket, by his actions.
However - many Debt Collection Agencies, in spite of the fact that it is illegal to do so, send out letters that are almost identical to the legal 'Statutory Demand' form, in the hope of scaring debtors into paying. This said, it is best to get clarification, either from a solicitor or from your local CAB, that what you have is the genuine article.
If it is genuine, you should still take further advice if you wish to avoid bankruptcy.

tiger5000

I suspect that the creditor, in my case, will petition for bankruptcy - purely out of spite. Its money down the drain, but he can easily afford it.
They have never stood a chance of getting this money from me because I haven't got it.
I'm sure what has been posted is genuine, even though it hasn't been served. Their covering letter states that it will be served.