Response to a Statutory Demand
Formal response disputing a statutory demand for payment, to be used as the basis for an application to set the demand aside before the 18-day deadline.
When to use this template
Use this letter urgently if you have received a statutory demand — a formal demand for a debt of £5,000 or more (for individuals) under the Insolvency Act 1986. You have only 18 days from service of the demand to apply to court to have it set aside. If you do not respond and the debt remains unpaid, the creditor can petition for your bankruptcy after 21 days.
When NOT to use this template
If you genuinely owe the debt and cannot dispute it, you should take immediate advice about debt management options rather than disputing without grounds. Disputing a demand without a genuine basis is not a defence to a bankruptcy petition and can result in cost orders against you. If the debt is undisputed but you cannot pay, contact a debt charity such as StepChange immediately.
Legal Basis
Insolvency Act 1986, s.267 (grounds for bankruptcy petition); Insolvency Rules 2016, r.10.4 (application to set aside statutory demand); r.10.5 (grounds for setting aside). The court may set aside a demand where: the debt is genuinely disputed on substantial grounds; the debtor has a counterclaim equal to or exceeding the demand; the creditor holds adequate security; or it would be unjust in all the circumstances to allow the petition to proceed.
Common Mistakes to Avoid
- ✗Missing the 18-day deadline to apply to set aside — this is a hard deadline
- ✗Sending this letter instead of filing Form IAA at the County Court — the letter alone does not set the demand aside
- ✗Not identifying specific grounds that would satisfy the Insolvency Rules r.10.5
- ✗Confusing disputing the statutory demand with disputing the underlying debt proceedings
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Letter preview
[YOUR FULL NAME] [YOUR ADDRESS] [DATE OF THIS LETTER] [CREDITOR'S NAME (PERSON OR COMPANY WHO SERVED THE DEMAND)] --- Dear Sir or Madam, **WITHOUT PREJUDICE SAVE AS TO COSTS** **RESPONSE TO STATUTORY DEMAND DATED [DATE THE STATUTORY DEMAND WAS SERVED ON YOU]** **Alleged debt: £[AMOUNT STATED IN THE DEMAND (£)]** I write in urgent response to the statutory demand served on me on [DATE THE STATUTORY DEMAND WAS SERVED ON YOU] in the sum of £[AMOUNT STATED IN THE DEMAND (£)]. I do not accept that I owe this sum, or any part of it, and I intend to apply to the court to set aside the demand within the statutory 18-day period. I set out the grounds for my dispute below. **Grounds for disputing the demand** [YOUR GROUNDS FOR DISPUTING THE DEBT] **Legal basis** Under Rule 10.5 of the Insolvency Rules 2016, the court must set aside a statutory demand where the debt is disputed on grounds that appear to the court to be substantial. I submit that my grounds of dispute are substantial and that the demand should be set aside. **My position** I do not accept that the statutory demand is valid or that the debt is owing as claimed. I am in the process of preparing an application to the court under Rule 10.4 of the Insolvency Rules 2016 to have the demand set aside. Without prejudice to that application, I invite you to withdraw the statutory demand voluntarily within 7 days of this letter, thereby avoiding the costs and inconvenience of court proceedings for both parties. If you do not withdraw the demand by [DEADLINE YOU ARE GIVING THE CREDITOR TO WITHDRAW (7 DAYS FROM TODAY)], I will proceed with my court application and reserve the right to seek costs against you if the demand is set aside. Yours faithfully, [YOUR FULL NAME]
Unfilled fields appear as [FIELD NAME]. Review the letter carefully before sending. This template is a starting point — adapt it to your specific circumstances.