Statutory Demand received. What is the time limit?

Wilding

I received a Statutory Demand (SD) a few months ago which is a prelude to a bankruptcy petition.

I ignored it because I don't oppose a bankruptcy. I have no assets or property. It just writes off the debt.

However, the creditor has not petitioned.

If there a time limit on an SD after which they must start the petition?

National_Debtline

Hi Wilding


A creditor is usually expected to apply for bankruptcy within 4 months of the statutory demand being issued. If it takes them longer they have to explain the reasons why to the court. Some creditors issue statutory demands as a scare tactic and don't follow through with bankruptcy, although some companies that were doing this on a widespread basis were cracked down on.


If you want to go bankrupt it can be advantageous the creditor applying, as it saves you finding the fees. I would always suggest getting some specialist advice on the full ins and outs of bankruptcy as there are downsides. You can get this kind of help from one of the free debt advice agencies if needed.


Susie
@natdebtline

Wilding

Hi, I researched the ins and outs of BR and it suits me to have the creditor petition it.

I only have one creditor, and no assets or income. It's a clean straightforward BR.

My question is whether there is a time limit which a petition must be made after an SD is served.

It's leaving me in limbo not knowing whether a BR is going ahead. I've cleared bank accounts and cannot use them until the SD expires, or the Insolvency Service grants me the use of a bank account.

Official legal advice cannot find an answer to this.

sourcrates

National_Debtline wrote: »

Hi Wilding


A creditor is usually expected to apply for bankruptcy within 4 months of the statutory demand being issued.

Susie
@natdebtline

Wilding wrote: »

Hi, I researched the ins and outs of BR and it suits me to have the creditor petition it.

I only have one creditor, and no assets or income. It's a clean straightforward BR.

My question is whether there is a time limit which a petition must be made after an SD is served.

Official legal advice cannot find an answer to this.

Hi,

National debt-line has given you an answer above.

Certain aspects of debt solutions, inc Bankruptcy, are covered by guidelines rather than out and out rules.

It could be your creditor was bluffing, you could write to them and ask what the situation is, as you need to ascertain your position.

fatbelly

Following the excessive use of these things a few years ago the OFT made firms aware that they should only use them where they were seriously considering bankruptcy. This fed through to the FCA guidance

A firm should not make undue, excessive or otherwise unfair use of statutory demands (within the meaning of section 268 of the Insolvency Act 1986)
when seeking to recover a debt from a customer.

but it's going to look a bit odd if you contact them to insist they make you bankrupt. Maybe use reverse psychology and as them not to!

Wilding

I'm inclined to agree with fatbelly. I've stayed silent, but I want to know if an SD becomes statute barred sooner than the 6-year Limitation Act. I don't want 6 years of uncertainty.

They either petition or I do it.

The answers here suggests there is no official limit on an SD which I can hold a petitioner bang to rights.

Can anyone point me to the "guidelines". I'll see if there is a limit set by them.

fatbelly

https://www.insolvencydirect.bis.gov.uk/technicalmanual/Ch37-48/chapter45/part10/part_10.htm

https://www.justice.gov.uk/courts/procedure-rules/civil/rules/insolvency_pd#III

Wilding

That is very good information.

It only says the petition can be filed after three weeks. It doesn't say when the SD expires at which the petition may not be filed.

sourcrates

Wilding wrote: »

That is very good information.

It only says the petition can be filed after three weeks. It doesn't say when the SD expires at which the petition may not be filed.

Grey areas exist in most parts of government legislation unfortunately.

I’d go with Fatbelly view on this.