Statutory demand

statutory demand: a formal demand for payment, issued by a creditor to either an individual or a company; it can be the precursor to a bankruptcy order (in the case of an individual) or a winding up order (in the case of a company), as failure to pay the sum specified in the statutory demand within 21 days can trigger deeming provisions in the Insolvency Act 1986 that empower a court to make a bankruptcy order or winding up order. Where the debt specified in a statutory demand is in genuine dispute, individuals and companies served with statutory demands can obtain court relief preventing the creditor from issuing a bankruptcy petition or winding up petition based on the statutory demand.