Getting Statutory Demand Set Aside**WON IN COURT**

[user56565]

Hi All

My other half got a statutory demand serviced to her on the xxth. This is the first step towards bankruptcy. The DCA (AIC - Allied International Credit) are crap for having taken things so far. The situation is described more thoroughly here: http://www.consumeractiongroup.co.uk...aic-casey.html

I want to get this set aside and I would be really really grateful for any help so I can get the statutory demand set aside. I know many other CAG'ers have been starting to receive these Statutory Demands, and I think they may all benefit from the experience that we will be shortly going through.

I've put the details of the statutory demand in the second post.

GETTING THIS SET ASIDE

The two forms required to set this aside are:
http://www.insolvency.gov.uk/pdfs/forms/6-4.pdf
http://www.insolvency.gov.uk/pdfs/forms/6-5.pdf

Form 6.5 is where you have to write in why it should be set aside and I have drafted a response below:

My draft response

(1) Do not admit the debt because the debt is in dispute.

The creditor has defaulted under section 78 of the Consumer Credit Act 1974 for failing to provide a copy of the alleged agreement on request within the prescribed period. The prescribed period as stated in SI 1983/1569 Consumer Credit (Prescribed Periods for Giving Information) Regulations 1983 is 12 working days. Under the provisions of s78 (6), the creditor is not entitled to enforce the alleged agreement while this default continues.

My request under s78 of the Consumer Credit Act 1974 was sent to Allied International Credit (UK) Limited, the debt collection agency who claim to be dealing with the alleged agreement and have raised the statutory demand. This request was received and signed for on the xx xxxx 2007. At this present date (xx xxxx 2007), Allied International Credit (UK) Limited have had 13 working days to comply with the request made, and are therefore in default as stated above.

Further, I believe that the amount of £****.** referred to in the statutory demand includes a substantial sum of unlawful penalty charges. Allied International Credit (UK) Limited have not provided further information regarding the charges they have added to the account despite my requests by telephone, and still have not provided a statement of account (as requested under s78 CCA 1974).

Questions to you, please help!!!

Does this seem reasonable so far or are there any amendments/additions I should put in??

Also, doesn't it seem that there are some errors in their demand? They list Amex as the creditor but the address of the DCA. Also Part C is blank and if the debt has been assigned this shouldn't be?

Has anyone else applied to get one of these put aside and what is the full process around this? I've searched through the threads and believe that a £65 fee is payable. Is this refundable if the set aside is successful?

Please help! We got this on the xxth and therefore HAVE TO SUBMIT A REPLY BY xxxxxDAY!!!!

Thanks!!!

[user56565]

STATUTORY DEMAND UNDER SECTION 268(1)(a) OF THE INSOLVENCY ACT 1986. DEBT FOR LIQUIDATED SUM PAYABLE IMMEDIATELY.

Demand

This demand is served on you by the creditor:
American Express Services Europe Limited
Address: AIC, 389 Argyle Street, Glasgow, G2 8LR

The creditor claims that you owe the sum of £****.** full particulars of which are set out on page 2, and that it is payable immediately and, to the extent of the sum demanded, is unsecured.

The creditor demands that you pay the above debt or secure or compound for it to the creditor's satisfaction.

Dated: xxth xxxx 2007

Part A

The creditor demands the sum of £****.** in respect of monies due under a credit agreement numbered .............. between the debtor and the American Express Services Europe Limited.

The Creditor further claims the additional sum of £150.00 being the costs of preparation of the Statutory Demand and the agents fees on service.

Part B

[Just some details here of the Agent: Legal & Receivables Ltd]

Part C

For completion if the creditor is entitled to the debt by way of assignment.

[This has been left blank]

How to deal with

....If you dispute the demand in whole or in part you should contact the ....individuals named in Part B immediately.

If you consider that you have grounds to have this demand set aside or if you do not quickly receive a satisfactory written reply from the individuals in part B..., you should apply within 18days ......to have the demand set aside.

Any application to set aside the demand (Form 6.4 in Schedule 4 to the Insolvency Rules 1986) should be made within 18days from the date of service upon you and be supoprted by an affidavit (Form 6.5 in Schedule 4 to those rules) stating the grounds on which the demand should be set aside. The forms may be obtained from the appropriate court when you attend to make the application.

[Belaflat]

1st of all how was she served with the SD, was it in person, registered post or just second class mail.

A lot of DCAs use the SD trick to try and force people into action through fear and ignorance. If it arrived via 2nd class post, I wouldnt be too worried at this time.

[PriorityOne]

If it arrived 2nd class post and she has acknowledged it.... then it's as good as served. However, if they have not complied with her request for a CCA, then the debt remains in dispute. Non-compliance of a CCA request is a complete defence in any court claim that is issued against her.

[user56565]

Hi Guys

Thanks for replying!! Scales have been tipped for each of you.

Papers were served in person using a proper blokey. Dunno what you call them.

We have made no correspondence with the DCA or orginal creditor regarding this. We tried to get advice from the CCCS who referred us to the Legal Partnership. They couldn't help us due to her income and equity in property.

Does you guys think the draft response look ok then so far??

[PriorityOne]

This is the first time I've read of a Stat Demand being served in person.... so I assume they are not bluffing then. I am also assuming that they have gone down this route because your partner is a homeowner and they are smelling equity...

On the face of it, your defence looks fine, but I would get some other opinion on here as well... in case I'm missing something. If they're in default of a CCA request, then I don't know what they're playing at.

However, if AIC have received the CCA request, they've probably sent the account back to Amex... and Amex have issued the SD. Under the circumstances, it might be prudent to CCA Amex as well.... and if they comply, look into sending a S.A.R - (Subject Access Request) in order to re-claim any unlawful charges from Amex.

Anybody else have any views on this ?

[Belaflat]

Looking back, I see the date of the SD is the 5th April which is before the CCA request was sent although the service hadnt been effected until after this was received. Would the process server be aware of this, should the DCA have informed him that the account had been placed in dispute?

I would have thought that they should have put proceedings on hold once the dispute was registered but I have no idea of the workings of the legal machine in this area. Hopefully, some more knowledgeable members will be along soon to help clear up some of this.

Out of interest, what is the financial status of your other half, tenant or homeowner and if owner, is it joint or sole ownership.

[humbleman]

Originally Posted by user56565

Hi All

My other half got a statutory demand serviced to her on the 17th. This is the first step towards bankruptcy.
Thanks!!!

First of all they can't issue SD for these kind of debts unless they have obtained a CCJ against you. Its an abuse of process.

Secondly once you reply to them within the 18 days listing your grievences/disputes they will have no choice but to address them before proceeding any further. IN the unlikely event it goes to a hearing and you can convince the judges that there is a dispute/triable issue, the judge will set this aside. SD should only be issued for debts like Rates, Revenue, Rent or when a CCJ has already been obtained

[user56565]

Thanks all.

She's a homeowner (with mortgage). It's all in her own name so sole ownership.

Amex, as far as we are aware, have nothing to do with this. When she has phoned them, they've refused to dicsuss anything with her and have referred it all to AIC. They won't even take token payments. Mr. Brown (at AIC) has always insisted on full payment (by 5pm etc..) and has threatened reposession of the property, amongst other things. Neither will admit who owns the debt. It's weird though how they've listed Amex as the creditor but left AIC's address there, and left Part C (details of assignees etc) blank.

We will be sending out a S.A.R - (Subject Access Request) to American Express on Monday.

Regarding the dates, we wrote out the CCA and had the envelope sealed on the xxth but didn't get to a post office until the xxth (we had no idea they would be sending out the SD so didn't rush it). They've dated their SD the xxth, but the service blokey only made his first attempt on the xxth. It wasn't in an envelope or anything, so that bloke could have read it all.

Will this automatically then go to a hearing once we've put in the application??

[PriorityOne]

Originally Posted by user56565

Thanks all.

She's a homeowner (with mortgage). It's all in her own name so sole ownership.

That's why they are getting heavy with her....

Amex, as far as we are aware, have nothing to do with this. When she has phoned them, they've refused to dicsuss anything with her and have referred it all to AIC. They won't even take token payments.

It doesn't matter whether they will "take" token payments or not.... send them anyway. It makes them less likely to go for a CCJ because regular payments have been maintained. It also looks good on your part if it goes to court.

Mr. Brown (at AIC) has always insisted on full payment (by 5pm etc..) and has threatened reposession of the property, amongst other things.

The say all kinds of bowlarks on the 'phone... that's why you should never deal with them on the 'phone. A CCJ is needed before a property charge anyway....

Neither will admit who owns the debt. It's weird though how they've listed Amex as the creditor but left AIC's address there, and left Part C (details of assignees etc) blank.

A CCA to both will determine who owns it.... but my guess is that it belongs to Amex and AIC are collecting on their behalf.

We will be sending out a S.A.R - (Subject Access Request) to American Express on Monday.

For the cost of £1 and rec. delivery postage.... CCA them as well.

Regarding the dates, we wrote out the CCA and had the envelope sealed on the 4th but didn't get to a post office until the 10th (we had no idea they would be sending out the SD so didn't rush it). They've dated their SD the 5th, but the service blokey only made his first attempt on the 13th. It wasn't in an envelope or anything, so that bloke could have read it all.

Will this automatically then go to a hearing once we've put in the application??

I assume so.... but someone else may have to advise on this one. AIC have had your CCA... but the SD is from Amex. Amex might be using this discrepancy as a loophole to get out of non-compliance with your request as being a defence to the SD.... just a thought.

[toddle2u]

First of all they can't issue SD for these kind of debts unless they have obtained a CCJ against you. Its an abuse of process.

The above advice from humbleman is incorrect. They can issue them as they have done in this instance. As it seems that the CCA and the serving of the SD ave 'crossed in the post' as such it is not an abuse of the process. If the CCA had been sent prior to the SD being served this would have been an abuse of the Court process as the debt was in dispute. It is imperative that you apply to the Courts to have this set aside and pay the appropriate fee. I beleive that the Defence you have provided will suffice.

Secondly once you reply to them within the 18 days listing your grievences/disputes they will have no choice but to address them before proceeding any further. IN the unlikely event it goes to a hearing and you can convince the judges that there is a dispute/triable issue, the judge will set this aside. SD should only be issued for debts like Rates, Revenue, Rent or when a CCJ has already been obtained

The above again is incorrect. It is not enough to raise the dispue with the creditor. The SD has to be set aside through the Courts as stated above. If you start raising the disputes with the creditor the 18 days to have it set aside could pass and the SD could then become enfoceable and the creditor could issue a bankruptcy petition because you have not applied to have the SD set aside. SD's can be served for any debt over £750 that is not substantially in dispute and not just the reasons that humbleman states.

[humbleman]

toddle2u

First of all they can't (perhaps I should I used the word shouldn't) issue SD for these kind of debts unless they have obtained a CCJ against you. Its an abuse of process.

BUt you would have argued all the same anyway, I am not here to score points. I will let you take over.

[toddle2u]

Humbleman - It is nothing to do with scoring points but giving people the right advise.

[Belaflat]

OK, lets just step back and have a look at what we have and what the reasoning may be.

Introduction to Statutory Demands

A statutory demand gives a person 21 days warning to pay the debt. After that the statutory demand has runs it course and it can followed by a bankruptcy petition.

In the minds of a creditor or a creditor’s solicitor a statutory demand is the legal equivalent of a 'warning shot from a gun'. This is because the average debtor is so scared by 'what may follow' that they usually pay up.

In fact statutory demands are so successful that in 99% of cases following the issue of a statutory demand a bankruptcy petition NEVER is issued.

A Statutory Demand is the first step to bankruptcy against an individual and this is prepared and served without any court involvement. A statutory demand can be served as soon as the debt is due and a judgment is not necessary. If the debtor disputes the claim, he or she can apply for the statutory demand to be set aside. The bankruptcy court will halt the bankruptcy if there is any dispute about the sum outstanding. It can be relatively easy for a debtor to have a statutory demand set aside and the process can result in an order for costs being made against the creditor.

Please note that a statutory demand in 90% of instances is 'bluffing technique' used to scare a person into paying up. If a bankruptcy petition does not follow then this will become apparent.

Does not need to have been CCJ'd although this would seem the standard practice as opposed to legal requirement. As to whether or not it is a high powered bluff, its a risk.

When is a statutory Demand a threat?

A statutory demand is something to worry about if your debts are over, say, £1000.

A statutory demand is a threat if the person after the debt is wealthy enough to carry out the bankruptcy threat the whole way.

A statutory demand is a cause for concern if the person after the debt is bitter and angry enough to actually make you bankrupt.

If you are a home owner or actually have assets you are at risk of losing if you go bankrupt then a statutory demand is a threat.

The person you owe the money to knows you are a home owner or have assets therefore is willing to spend money making you bankrupt.

If your reputation is at risk by the public finding out about the statutory demand process being started against you

Obviously this is applicable to yourselves.

The procedure to get a statutory demand set aside.

After the period of 21 day from the statutory demand being served the person issuing the statutory demand may begin the process that petitions the person’s bankruptcy.

One method of avoiding bankruptcy is to get the statutory demand set aside.

To successfully get a statutory demand set aside one or more of the following must be satisfied:-

The amount stated on the statutory demand is disputed.

The person issuing the statutory demand also owes money. This is called a counterclaim.

The person issuing the statutory demand is holding security that equals or exceeds the amount owing.

The demand was issued in error.

The amount owing is less than £750

Execution has been stayed on a judgement debt.

The debtor is complying with an instalment order. This would mean the debt is not actually owed as it is being paid back.

The creditor failed to comply with the rules and prejudiced the debtor in the process.

The 1st one applies to you.

Following on them lets have a look at a worst case scenario where perhaps the SD isnt set aside and you end up at Court.

What will happen at Court?


The Court will either hear your petition straight away or arrange a time for the Court to consider it.

If English is not your first language and you need an interpreter, the Court will not be able to help you find one. You will have to do this yourself and pay interpreter's fees.

At the hearing the Court can do one of four things:

Stay (delay) the proceedings - often because the Court needs further information before it can decide whether to make a bankruptcy order.
Dismiss the petition - perhaps because an administration order would be more appropriate.

Appoint an Insolvency Practitioner - if the Court thinks that an Individual Voluntary Arrangement would be more appropriate. This will only be possible if your assets are more than £2,000; your unsecured debts are less than £20,000; and you have not been bankrupt or made an Individual Voluntary Arrangement in the previous five years. If you do not wish to enter into such an arrangement, you should inform the Court.

Make a bankruptcy order. You will be bankrupt the moment the order is made by the Court.

It still does not necessarily lead to bankruptcy but if it did then are you done for.? Again, its not the end, you can apply for an annulment.

When can I apply for an annulment?

You can apply for an annulment at any time if:

the bankruptcy order should not have been made, for example because the proper steps involved in obtaining the order were not followed; or

all your bankruptcy debts and the fees and expenses of the bankruptcy proceedings have been either paid in full or guaranteed to the satisfaction of the court; or

you have reached an agreement called an “individual voluntary arrangement” with your creditors to repay all or part of your debts.

The second could be applied in your case as your partner could secure the money owed against her house. If she has three or more creditors then the third may apply also.

Obviously all of this would lead to greater expense and trouble but the point of this post is to try and show that no matter high the doodoo is rising around you, all need not be lost.

Is your DCA bluffing, I cannot say, its certainly gone further than most in having your SD served personally but then are the DCAs reading sites like this and realising that we are fighting back and they are merely upping the ante.

We will have to wait and see if we get a spate of personally served SD's hitting more of us.

Could have gone on but this post is starting to ramble and my fingers are getting tired. lol.

Dont get too downbeat just yet.

All info quoted above was taken from the UK Insolvency helpline site.