What are Statutory Demands

Thousands of people around the country are being bombarded with Statutory Demands, sent by debt collectors threatening legal action and bankruptcy if these demands are not met. The debt collectors are simply acting on behalf of a bank or lender who has not been paid back on time. These often strike fear into people, and it can lead to the belief that the bank is pressurising you to come up with the money. This is true, but one should not feel threatened and statutory demands are surprisingly common during tough times like these; therefore it is important not to act rashly when you receive one. The debt collector will generally be working on hundreds of different people who the banks or lenders have targeted as risks. Simply put, a debt collector will try to get as much money as possible from you, in as short a space of time as possible; their directive is to get the bank’s money back, they aren’t interested in your long term future.

It can therefore seem like debt collectors are the bad guys, but in reality they are just doing the job they have been contracted to do. It is the banks and lenders who are acting in a harsh way, especially if they have not spoken to you at length about the financial difficulties you are facing. A high street bank, especially, should always be available to give you advice and help when you are struggling, since it is in their interests that your long term financial stability is sustained. It only once the bank has decided that you either have no intention of paying back the debt, or are simply unable to, that they will look to use a Statutory Demand to try and get their money back.

The Statutory Demand must legally be underwritten by a valid debt that the bank can prove has not been paid. The document will simply state that a certain amount must be paid immediately, or you will face bankruptcy. Statutory Demands are not often issued unless the situation has become serious, but they have been known to come as a surprise to many people, and may be based on misinformation. For example, the bank may have mixed up the original terms of the loan that you took out, believing the repayment structure to be different to that which was originally agreed; alternatively it could be you that has missed payments because of human error rather than lack of funds. In these cases, it is important to look up the original terms of the agreement that you made with the bank. If you are able to find out the exact dates on which the debt was due to be paid, you can ensure that the Statutory Demand is valid.

When looking at the validity of the Statutory Demand, you will cal on the Consumer Credit Act, which brought into force in 1974. This states that for the demand to be enforced, a full agreement which has been signed by both parties (stating the full terms of the loan, including interest payments and dates) must be provided. By calling upon this act, you can make absolutely sure that you are not simply receiving empty threats from debt collectors.

If you are not completely sure about the legalities of a Statutory Demand, it is always a good choice to talk to a professional. In these cases, professional advice can save you huge amounts of stress and money, making the difference between bankruptcy and a stable financial future. Statutory Demands are infamous for scaring consumers into rash decisions, and they can cause a feeling of intense pressure from the debt collector; with professional help, the whole process will seem much less worrying.

If you are completely unable to meet the demands of the bank, it is likely that bankruptcy or an iva is one of your only options. This may seem like the worst thing that could ever happen to you, but bankruptcy has given many people the chance to make a fresh start.