Q&As

If a creditor and a debtor enter into an instalment agreement in respect of the debt, and the debtor defaults on the agreement, can the creditor rely on a six-month-old statutory demand served on the debtor before the instalment agreement was entered into?

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Published on LexisPSL on 05/04/2018

The following Restructuring & Insolvency Q&A provides comprehensive and up to date legal information covering:

  • If a creditor and a debtor enter into an instalment agreement in respect of the debt, and the debtor defaults on the agreement, can the creditor rely on a six-month-old statutory demand served on the debtor before the instalment agreement was entered into?
  • Company debtor
  • Individual debtor
  • Is there any limit on the period between the service of a statutory demand and the presentation of a petition?

There is no statutory provision or case law that answers whether a six-month old statutory demand can (without more) be relief upon. The following information may however be useful.

It should be noted that statutory demands should only be served on the debtor where the debtor owes the creditor a qualifying debt above the prescribed minimum threshold. See Practice note: What is a statutory demand? for further reading.

Company debtor

Where the debtor is a company, any statutory demand to be served on the company must contain the information set out in the Insolvency (England and Wales) Rules 2016 (IR 2016), SI 2016/1024, r 7.3 (see also section 123 of the Insolvency Act 1986 (IA 1986)).

Under IR 2016, SI 2016/1024, r 7.3(1)–(3), a statutory demand must among other things:

  1. identify the company and the creditor

  2. state the amount and make clear how it arose

  3. state the 21-day time period within which it must be complied with

  4. the method of compliance

Following the service of a statutory demand on a company, if the com

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