If you are in business, whether it’s in the capacity of a company director, in management or if you represent a company as its accountant, you must know of the power of a Statutory Demand. This article sets out the huge benefits in using this as a method of very quickly and effectively collecting a debt. Alternatively, if your company receives a Statutory Demand you will see the need to act urgently and seek immediate legal advice.
If you are owed money for goods or services, the first step in attempting to recover it is generally to send a letter of demand to the other party setting out the amount of money outstanding and giving them a defined period of time within which to settle the matter by paying you the money owed or face legal action.
Letter of Demand
The letter of demand is sent by you if you are owed the money (the creditor) or your lawyer and warns the person owing the money (the debtor) that if they don’t pay the debt within a certain time period (often seven days) they will be sued in court to recover the debt.
A letter of demand should be the last letter a creditor sends before issuing court proceedings. While letters of demand are not court documents they are often an effective means of forcing the debtor to take action.