Debt collection & bankruptcy

[tapas]

I am in dispute with the Halifax CC to reclaim my overcharges(£425),
I have just received a statutory demand for the debt(£1000) from connaught collections on behalf of 1st credit finance(Halifax CC debt) to be paid in full within 21 days or court action and bankruptcy will be filed against me..

Shall I just email them telling them to wait till the Halifax has paid up?

send them a copy of the letter I have sent the Halifax?

Ignore them?

[PI Guy]

are you saying the debt is in dispute> if so you need to have the stat demand set aside.

Legal Issues Explained - Statutory Demand

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.

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What are the time limits to get a statutory demand set aside?

An application to set aside must be made with 18 days of the statutory demand being served.

What forms must be used to get a statutory demand set aside?

Forms 6.4 (application) and 6.5 (affidavit) must be completed and taken to the court.

Can the court dismiss an application to set a statutory demand set aside?

Yes, if application if there are no reasonable ground to do so.

What forms are typically used in the statutory demand process?

1. Form no: 4.1
   Statutory Demand under section 123(1)(a) or 222(1)(a) of the Insolvency Act 1986
   Download Form 4.1.pdf*
2. Form no: 6.1
   Statutory Demand under section 268(1)(a) of the Insolvency Act 1986. Debt for Liquidated Sum Payable Immediately
   Download Form 6.1.pdf*
3. Form no: 6.2
   Statutory Demand under section 268(1)(a) of the Insolvency Act 1986. Debt for Liquidated Sum Payable Immediately Following a Judgment or Order of the Court
   Download Form 6.2.pdf*

Proof of service of statutory demand

• Where under section 268 the petition must have been preceded by a statutory demand, there must be filed in court, with the petition, an affidavit [or affidavits] proving service of the demand.
• The affidavit must have exhibited (attached) to it a copy of the demand as served.
• Subject to the next paragraph, if the demand has been served personally on the debtor, the affidavit must be made by the person who effected that service.
• If service of the demand (however effected) has been acknowledged in writing either by the debtor himself, or by some person stating himself in the acknowledgement to be authorised to accept service on the debtor's behalf, the affidavit must be made either by the creditor or by a person acting on his behalf, and the acknowledgement of service must be exhibited to the affidavit.
• If neither paragraph (3) nor paragraph (4) applies, the affidavit [or affidavits] must be made by a person [or persons] having direct personal knowledge of the means adopted for serving the statutory demand, and must:

(a) Give particulars of the steps which have been taken with a view to serving the demand
(personally), and
(b) State the means whereby (those steps having been ineffective) it was sought to bring the demand
to the debtor's attention, and
(c) Specify a date by which, to the best of the knowledge, information and belief of the person making
the affidavit, the demand will have come to the debtor's attention.

• The steps of which particulars are given for the above purposes must be such as would have sufficed to justify an order for substituted service of a petition.
• If the affidavit specifies a date for the purposes of compliance with sub paragraph (c), above, then unless the court otherwise orders, that date is deemed for the purposes of the Rules to have been the date on which the statutory demand was served on the debtor.
• Where the creditor has taken advantage of Rule 6.3(3)(newspaper advertisement), the affidavit must be made either by the creditor himself or by a person having direct personal knowledge of the circumstances; and there must be specified in the affidavit:

(a) The means of the creditor's knowledge or (as the case may be) belief required for the purposes
of that Rule, and
(b) The date or dates on which, and the newspaper in which, the statutory demand was advertised
under that Rule;
and there shall be exhibited to the affidavit a copy of any advertisement of the statutory demand.

• The court may decline to file the petition if not satisfied that the creditor has discharged the obligation imposed on him by Rule 6.3(2).

[powelll]

Also bear in mind that a Stat Demand doesn't necessarily mean they will petition for bankruptcy ( cheap as chips for an SD, good few hundred quid for actual petition for bankruptcy hearing ). More and more DCAs seem ro be using stat demands as a threat...