Q&As

Can a petitioning creditor claim statutory interest and costs as part of the petition debt, including interest that was not stated in the statutory demand?

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Published by a LexisNexis Restructuring & Insolvency expert

Published on: 23 June 2015

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STOP PRESS: From 6 April 2017, the Insolvency Rules 1986, SI 1986/1925 were revoked and replaced by the Insolvency (England and Wales) Rules 2016 (IR 2016), SI 2016/1024. The content in this Q&A may have been affected by this change.

Claiming statutory interest, whether or not stated in the statutory demand

It should be noted initially that the courts have warned against the use of statutory demands and bankruptcy petitions for debt collection purposes, and certain claims which have been included in a petition debt in order to bring the petition debt up to the bankruptcy level (which will increase from £750 to £5,000 from 1 October 2015—see the Insolvency Act 1986 (Amendment) Order 2015, SI 2015/922) have been disallowed. For example, the costs of an abortive execution cannot be added to a judgment debt—see: Re Long, ex p Cuddeford.

Interest on a debt can be included in a statutory demand—this is specifically provided for

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Jurisdiction(s):

United Kingdom

Key definition:

Costs definition

What does Costs mean?

Money ordered to be paid by one party to another in respect of the costs incurred in the course of litigation, in bringing or defending a claim.

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