Just a word of warning to anyone who is considering using a Statutory Demand to collect in their debts. There is a UK based company who are busy sending out emails to businesses, stating that the simple way to collect in debts is to use a Statutory Demand – but what they are not telling people is the potential danger of doing this, or rather to be more correct, when we pointed this out to them, they say that they point out the pitfalls in their terms and conditions and of course, everyone reads those don’t they? In our opinion, they should not leave this for their customers to find out by chance or the hard way, they should make this very clear before they proceed.
Statutory Demands can be a powerful tool in debt collection, but get it wrong and they can blow up in your face, spectacularly! If there is any doubt about the debt, or if the debtor has any chance of disputing the debt, then a Statutory Demand should not be used. The reason for this is that if the debtor does have a defence, they can ask their solicitor to apply to set aside the demand and if they are successful in doing so, the solicitor can then apply for ‘Taxed Costs’ which means that the issuer of the demand can face a bill of £1500-£2,000 (on average) and 14 days in which to pay it.
Our advice on Statutory Demands is to never issue one unless you have one of the three following criteria;
1. An admission in writing from the debtor that they owe the money
2. A County Court Judgment
3. A Bounced Cheque
If you don’t understand the process, don’t do it! If anyone needs advice on Statutory Demands or any legal debt collection process, you should call us, we don’t charge for having a chat!