A statutory demand is the most powerful pre-litigation tool available for undisputed debts. Serve it on a company owing £750+ or an individual owing £5,000+, and they face bankruptcy or winding-up proceedings if they do not comply within 21 days.
Most debtors pay before the 21 days expire.
£750
The minimum undisputed debt for serving a statutory demand on a limited company. Below £750, use a Letter Before Action and county court proceedings instead.
What happens after 21 days?
You can issue a winding-up petition. This petitions the court to liquidate the company — a serious threat that most trading companies will avoid at all costs.
£5,000
The minimum undisputed debt for serving a statutory demand on an individual. Below £5,000, use a Letter Before Action and small claims court proceedings.
What happens after 21 days?
You can issue a bankruptcy petition. This petitions the court to declare the individual bankrupt, with severe consequences for their credit, property, and employment.
| Factor | Letter Before Action | Statutory Demand |
|---|---|---|
| Minimum debt | Any amount | £750+ (company) / £5,000+ (individual) |
| Court judgment needed? | No — but recommended | No — can be used pre-judgment |
| Time to compel payment | 14 days | 21 days |
| Leverage / threat level | Medium — court is next | Very high — insolvency threat |
| Risk if debt disputed | Low — court assesses dispute | High — demand may be set aside with costs |
| Cost | Low — £29.99 document pack | Moderate — process server + potential legal fees |
| Best for | Most debts — first formal step | Undisputed debts against solvent debtors |
Rule of thumb: Always start with a Letter Before Action. If the debtor is solvent, the debt is genuinely undisputed, and the amount meets the threshold, a statutory demand is a powerful escalation — but it should rarely be your first move.
Use the prescribed statutory demand form (SD1 for individuals, SD2 for companies). Include the exact debt amount, interest, and a statement that the debt is due.
A process server delivers the statutory demand directly to the debtor (or at the company's registered office). Personal service provides clear evidence of delivery.
The debtor has 21 days to pay, agree a settlement, or apply to set aside the demand. Most solvent debtors pay within this window to avoid insolvency proceedings.
If the debtor does not comply after 21 days, issue a bankruptcy petition (individual) or winding-up petition (company). The threat alone is often sufficient.
Statutory demands carry serious risks if used incorrectly. A specialist can assess whether your debt is suitable, handle the demand preparation and service, and advise on the next steps if the 21 days expire.
Get specialist advice on whether a statutory demand is right for your situation — or build your Letter Before Action first and escalate when appropriate.
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