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New Here - Advice on Statutory Demand for Bankruptcy


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I have been chased for last 17 years - yes 17 YEARS! - for a debt with Nat West. In 1991 made agreed reduced montly payments to Nat West for 2 consecutive years but they got greedy and repeatedly asked for increased payments when I would write to inform them that our circumstances remained the same (Working Tax Credits) and would attach documentation in support. At the end of 2 years I and exasperated with Nat West's unfair demands, I went to see CAB who told me that it was "a pity that you made any payments at all as if you hadn't the debt would have been wiped after 2 years!" icon_cry.gif Due to our financial hardship I was advised to stop making payments and let Nat West file County Court Judgement. This didn't happen - they sold on the debt and for the last 15 years I have lost count of debt collection agencies who have harrassed me for recovery of this debt.

 

I followed CAB advice - binned letters & switched vacuum on when they phoned (up to 3 times per day). I get couple of months peace each year - I guess when debt it being sold on - and then it starts all over... My latest 'new friends' are called 'CAP QUEST' and have been the most tenacious by far. On Tuesday I received something which worries me - STATUTORY DEMAN FOR BANKRUPTCY - saw CAB advisor today who seemed to 'think' it IS a legal document and that I should comply with it. Document states - Original Creditor: Nat West Plc Assignees: CapQuest Investments Ltd.

States that (a) I have 18 days to apply to the Court to have the Demand Set Aside and (b) You have only 21 days before the Creditor may present Bankruptcy Petition. It also recommends that if I need clarification I should seek advice of solicitor.

 

CAB told me to download forms 6.4 Application to Set Aside a Statutory Demand and 6.5 Affadavit in Support of Application to Set Aside Statutory Demand, complete them (not too confident) and take them to Court tomorrow.

 

Would anyone happen to know for sure if in fact this is actually a legal document that I have to comply with? NB. I am not unduly worried about being forced into bankruptcy as we live in housing association accommodation, financial circumstances are worse now than at beginning of debt (husband out of work due to illness for last 5 years), 2 young teenage children to support, no assets of value and an old banger of a car!!! :Cry: Would it be in my best interest to go bankrupt (the debt is £2,575)? After 17 years I do want closure!

 

Anyone's advice would be very welcome at this present moment in time! Thanks in anticipation.

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Am I correct in thinking that you have not acknowledged this debt for 15 years (either by making payment or an offer of payment in writing)?

 

If this is the case then the account was statute barred many years ago - this means that no legal action can be taken to enforce the debt. That being said the statutory demand is something that you should apply to set aside. It's quite an easy process and is free to do, although you can and should apply for costs for your time.

 

Who is the DCA and what does it state on the statutory demand?

HAVE YOU BEEN TREATED UNFAIRLY BY CREDITORS OR DCA's?

 

BEWARE OF CLAIMS MANAGEMENT COMPANIES OFFERING TO WRITE OFF YOUR DEBTS.

 

 

Please note opinions given by rory32 are offered informally as a lay-person in good faith based on personal experience. For legal advice, you must always consult a registered and insured lawyer.

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Oh forgot to say welcome to CAG :)

HAVE YOU BEEN TREATED UNFAIRLY BY CREDITORS OR DCA's?

 

BEWARE OF CLAIMS MANAGEMENT COMPANIES OFFERING TO WRITE OFF YOUR DEBTS.

 

 

Please note opinions given by rory32 are offered informally as a lay-person in good faith based on personal experience. For legal advice, you must always consult a registered and insured lawyer.

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Hi Rory. You are correct in thinking I have not made any payments for 15 years but in the early years of being hounded by various DCAs I would occasionally write to refuse any payments based on my circumstances (in receipt of benefit) but cannot recall putting pen to paper for a few years now.

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Sorry - the DCA is called CAPQUEST! Stat Demand undeer section 268(1)(a) of The Insolvency Act 1986. Debt for Liquidted Sum Payable Immediately. So I guess it is the real McCoy! Anyhow my fears are calmed a little as I have this morning managed to secure an appointment with a well respected local advice centre - they usually have waiting lists 4-6 weeks but were kind enough to squeeze me in, albeit on the 18th day which is deadline for having Demand 'set aside'.

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Make sure you count the 18 days correctly. They are from service of the SD (when you received it) - not the date of the issue of the SD.

 

I would simply request the set aside on the basis that the account is statute barred under the Limitation Act 1980 Section 5 which states that “an action founded on simple contract shall not be brought after the expiration of six years from the date on which the cause of action accrued.”

HAVE YOU BEEN TREATED UNFAIRLY BY CREDITORS OR DCA's?

 

BEWARE OF CLAIMS MANAGEMENT COMPANIES OFFERING TO WRITE OFF YOUR DEBTS.

 

 

Please note opinions given by rory32 are offered informally as a lay-person in good faith based on personal experience. For legal advice, you must always consult a registered and insured lawyer.

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Hi Bezzer

Welcome to CAG and don't worry. We should be able to help before the 18th anyway.

First, some DCAs use a statutory demand [sD] just as a way of frightening people into paying. It does not come from any court, even though it looks 'official'. However, it is legal in the sense it is allowed under the Insolvency Act. All it does (if you don't have it set aside) is allow the DCA to set down a bankruptcy petition against you IF the debt is more than £750 AND they come up with a deposit in hard cash of around £600 with no guarantee of getting the money back. For this reason, many DCAs do not actually go for bankruptcy but it is nonetheless a threat that you have to take seriously.

If you want to avoid bankruptcy you have to have the statutory demand set aside by making an application to the court. An application to set aside the statutory demand can be made if:

  • There is a substantial dispute about the money owed;
  • There is a counterclaim of more than the money owed;
  • The creditor holds security that equals or exceeds the debt in value;
    • On ‘Other Grounds’. A debt that was statute barred would certainly fall into this category.

An application to set aside must be made with 18 days of the statutory demand being served. Forms 6.4 (application) and 6.5 (affidavit) must be completed and taken to the court. These forms can be downloaded from the Insolvency Service website [

http://www.insolvency.gov.uk]. A hearing will be arranged at which the court will decide whether the demand will be set aside.

Arrow Global/MBNA - Discontinued and paid costs

HFO/Morgan Stanley (Barclays) - Discontinued and paid costs

HSBC - Discontinued and paid costs

Nationwide - Ran for cover of stay pending OFT case 3 yrs ago

RBS/Mint - Nothing for 4 yrs after S78 request

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Thanks for that Rory but I have thrown envelope in bin and therefore cannot prove when I received it???

 

That's not important. When you complete the set aside application you will swear an oath that what you have stated is true and that is enough.

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How to have a Statutory Demand (SD) set aside

 

There are many creditors who are issuing Statutory Demands (SD’s) inappropriately i.e. as a threat only and have no intention of going the whole route of making someone bankrupt. I have therefore set out a step by step guide to defending yourself from these types of threats.

 

 

Now in my job as a Process Server, I serve a lot of SD’s and people generally have a misconception that they can avoid or evade being served. This misconception clearly comes from the influence of American movies where you see the process server attempting to serve the person who refuses to receive it in their hands.

 

 

In England, it is generally impossible to evade service of a SD and if a person is being evasive then we simply send them a letter of appointment via 1st class post and serve them through alternate service i.e. by putting the SD through the person’s door or even leaving somewhere and informing the person of where it is and what is on it. Alternate service is just that, some other way of serving the document and I have known documents being served by publishing it in the local papers or taking out an advert. Once the SD is served, generally a statement of service is written and signed by the Process Server

So what is an Statutory Demand?

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 judgement is not necessary. The link here is a PDF of a Debt for Liquidated Sum Payable Immediately and also Debt for Liquidated Sum Payable Immediately Following a Judgment or Order of the Court and Debt Payable at Future Date

So that’s what they look like. Lets look at the common strategies for dealing with them.

 

 

How to reduce the risk of bankruptcy following a statutory demand?

(a) To avoid bankruptcy reduce the debt to less than £750.

(b) Offer to pay the debt by instalments.

© Make a reasonable offer to settle the debt.

(d) Apply to have the Statutory Demand set aside on the grounds that the debt is in dispute.

 

 

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.

 

 

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.

 

 

Step 1 - So the best way of dealing with an SD is to accept the SD because it has lots of important information that you are going to need.

Step 2 - Read it carefully and decide if the particulars are correct. The debt has to be over £750 and not in dispute.

Step 3 - Write to the person named in part B of the SD informing him/her that the debt is in dispute and say why.

 

 

Step 4 - Print out an Application to Set Aside a Statutory Demand and an Affidavit in Support of Application to Set Aside Statutory Demand which you must fill in and present at the court within 18 days of being served.

I would have a read of this thread over at the Consumer Action Group which has some very sensible advice too.

 

 

And that’s the process. If you have any doubts about how to do this then I would strongly recommend consulting a Solicitor.

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