---
title: "Setting Aside a Statutory Demand as an Individual"
url: https://lexlaw.co.uk/solicitors-london/setting-aside-a-statutory-demand-as-an-individual/
date: 2026-04-15
modified: 2026-06-02
author: "LEXLAW Solicitors & Barristers"
description: "You have just 18 days to challenge a statutory demand. Act fast, if you have a genuine dispute or legal defence, you may be able to stop bankruptcy proceedings. This succinct guide provides legal guidance from City of London's specialist insolvency litigation team."
categories:
  - "Bankruptcy"
  - "Bankruptcy Petitions and Annulments"
  - "Business and Property Courts"
  - "HMRC"
  - "Insolvency"
  - "Insolvency Litigation"
  - "Statutory Demands"
tags:
  - "bankruptcy advice UK"
  - "bankruptcy petition UK"
  - "debt dispute UK"
  - "debt recovery law"
  - "HMRC statutory demand"
  - "individual voluntary arrangement IVA"
  - "insolvency law UK"
  - "Insolvency Litigation"
  - "insolvency solicitors London"
  - "legal advice statutory demand"
  - "lexlaw"
  - "personal insolvency UK"
  - "set aside statutory demand"
  - "Statutory Demand"
  - "statutory demand defence"
image: https://lexlaw.co.uk/wp-content/uploads/ChatGPT-Image-Apr-14-2026-04_35_36-PM-1024x683.png
word_count: 1889
---

# Setting Aside a Statutory Demand as an Individual

Receiving a [statutory demand ](https://lexlaw.co.uk/set-aside-statutory-demand-insolvency-legal-advice/)is one of the most serious debt-enforcement steps a creditor can take against you as an individual. If left unanswered, it can be used as the foundation of a bankruptcy petition, a process with life-changing consequences for your finances, your home, and your professional reputation. The law, however, gives you specific and time-sensitive rights to challenge a statutory demand before matters escalate. This article explains what a statutory demand is, the legal grounds on which it can be set aside, the procedural steps involved, and why expert legal representation from the outset can be the difference between protecting your assets and losing them.

## What Is a Statutory Demand Served on an Individual?

A statutory demand is a formal written notice, governed by the [Insolvency Act 1986](https://assets.publishing.service.gov.uk/media/5a757e5240f0b6397f35edbc/The_20Insolvency_20Act_201986_20as_20it_20will_20apply_20to_20CIOs_20-_20Nov-12.pdf) and the [Insolvency (England and Wales) Rules 2016 ("IR 2016")](https://www.legislation.gov.uk/uksi/2016/1024/contents), through which a creditor demands payment of a debt it claims is owed by you. For individuals (as opposed to companies), statutory demands fall under [section 268](https://www.legislation.gov.uk/ukpga/1986/45/section/268) of the Insolvency Act 1986 and must either relate to an immediately payable debt or a future debt that has fallen due. The demand must be in prescribed form, must state the amount owed, the basis of the debt, and provide information about your right to apply to have it set aside.

Unlike a County Court judgment, a statutory demand is not a court order, it is a creditor's unilateral formal notice. The threshold for a bankruptcy petition based on an unsatisfied statutory demand is a debt of £5,000 or more (the threshold was raised from £750 by the [Corporate Insolvency and Governance Act 2020](https://www.legislation.gov.uk/ukpga/2020/12/contents) and made permanent by the Insolvency Act 1986 (Amendment) Order 2024). A creditor who serves a statutory demand and does not receive payment, a satisfactory offer of security, or a successful application to set aside within 21 days may present a bankruptcy petition to the court. [Our specialist team](https://lexlaw.co.uk/our-people/) regularly advises individuals who have been served statutory demands. whether from private creditors, banks, or HMRC. If you have received such a demand, do not delay: [speak to our statutory demand solicitors today](https://lexlaw.co.uk/contact-us/).

## The Critical 18-Day Time Limit to Apply to Set Aside

Time is of the essence. Under [Rule 10.4](https://www.legislation.gov.uk/uksi/2016/1024/rule/10.4) of the Insolvency (England and Wales) Rules 2016, you must make an application to set aside a statutory demand within 18 days of service of the demand. This is a strict deadline. Miss it, and you risk losing the ability to challenge the demand through the set-aside route, leaving you exposed to bankruptcy proceedings. Courts do have discretion to hear late applications in exceptional circumstances, but this is not to be relied upon. You must seek [immediate legal advice](https://lexlaw.co.uk/legal-case-assessment/) upon receiving any statutory demand, regardless of whether you believe the debt is legitimate.

Separately, if the demand is not set aside and remains unsatisfied, the creditor may present a bankruptcy petition after 21 days from service. It is therefore essential to act well within the 18-day window to instruct a specialist insolvency solicitor, gather evidence, and file a properly particularised application with the court. Our team based in [Middle Temple](https://www.middletemple.org.uk/) in the heart of the City of London, has successfully set aside statutory demands on behalf of numerous individuals, often within very tight time frames. [Learn more about our statutory demand set-aside practice](https://windinguppetitionsolicitors.co.uk/statutory-demand-set-aside-lawyers-london-hmrc/).

## Legal Grounds for Setting Aside a Statutory Demand Against an Individual

The court has jurisdiction to set aside a statutory demand served on an individual under [Rule 10.5](https://www.legislation.gov.uk/uksi/2016/1024/rule/10.5) of the Insolvency Rules 2016. The court must set aside the demand if any of the following grounds are established:

- **Genuine Dispute on Substantial Grounds: **The debt claimed in the statutory demand is genuinely disputed on substantial grounds. A mere assertion of dispute is insufficient; you must demonstrate that there is a real and credible basis for challenging the debt.

- **Counterclaim, Set-Off or Cross-Demand: **You have a counterclaim, set-off, or cross-demand against the creditor which equals or exceeds the amount of the debt claimed. Where your cross-claim equals or exceeds the statutory demand, the net debt falls below the threshold for bankruptcy proceedings.

- **Secured Creditor: **The debt is fully secured. A creditor who holds sufficient security over your assets cannot rely upon a statutory demand as a stepping stone to bankruptcy proceedings.

- **Other Grounds - Court Discretion: **Even where none of the above are strictly established, the court retains a discretion to set aside a demand where it appears that it would be unjust to allow the demand to stand. This might apply in cases of procedural irregularities, improper service, abuse of process, or where the demand relates to a jurisdictional challenge (as arose in the [LEXLAW](https://lexlaw.co.uk/contact-us/) case of[*Moskalev v Yanishevskiy [2021] EWHC 1575 (Ch)*)](https://lexlaw.co.uk/solicitors-london/client-case-study-moskalev-wins-against-yanishevskiy-for-improper-statutory-demand/).

## Case Law in Action: Moskalev v Yanishevskiy [2021] EWHC 1575 (Ch)

A clear illustration of the court's approach to applications to set aside a statutory demand and the risks a creditor runs in pursuing one improperly is provided by one of our own cases, **[Moskalev v Yanishevskiy [2021] EWHC 1575 (Ch)](https://lexlaw.co.uk/solicitors-london/client-case-study-moskalev-wins-against-yanishevskiy-for-improper-statutory-demand/)**

Our client, Mr Moskalev, an EU Cypriot national, was served with a statutory demand in England based upon a Hong Kong default judgment which he argued had been obtained by fraud. We applied to set aside the demand on two principal grounds: first, that Mr Moskalev's centre of main interests (COMI) was in Cyprus, not England and Wales; and second, that the underlying debt was disputed on substantial grounds given the fraudulently obtained judgment.

ICC Judge Barber found in Mr. Moskalev's favour, determining that numerous reasoned grounds for disputing the demand had been raised in our letter to the opposing side, grounds which should have told the respondent, at a glance, that the matter was not suitable for resolution by way of statutory demand and bankruptcy proceedings. The respondent's failure to withdraw the demand in good time was at his own risk as to costs. Ultimately, costs of **£47,400** were awarded against the creditor and paid to our client. This case underscores a vital point: a well-constructed and timely application to set aside, backed by detailed legal analysis, can not only protect you from bankruptcy but recover your legal costs from the creditor.

## The Procedure: How to Apply to Set Aside a Statutory Demand

The process for applying to set aside a statutory demand served on an individual involves the following key steps:

- **Complete Form IAA: **You must file Form IAA (Insolvency Act Application Notice) with the appropriate court (usually the Insolvency and Companies Court in London, or a District Registry or County Court with insolvency jurisdiction). The form must state the grounds on which you rely and include a draft order and copies of the statutory demand.

- **Prepare a Supporting Witness Statement: **Where the facts are in dispute, or where you wish to place evidence before the court, a witness statement in support of the application is essential. The witness statement must comply with the [Civil Procedure Rules (CPR)](https://www.justice.gov.uk/courts/procedure-rules/civil) and the Practice Direction on Insolvency Proceedings. It must set out the relevant facts, exhibit supporting documentary evidence, and conclude with a statement of truth.

- **File and Serve: **The application must be filed at court and served on the creditor (or their solicitors) within the 18-day window. Correct service is critical, failure to properly serve the application can give rise to jurisdictional complications.

- **The Hearing: **If the court is satisfied that there is sufficient basis for the application to proceed, it will list a hearing and notify both parties. At the hearing, the court will consider the evidence and legal submissions before deciding whether to set aside the demand, dismiss the application, or make directions for a further hearing. Our solicitors and barristers can represent you at all stages.

## The Consequences of Failing to Respond to a Statutory Demand

The consequences of ignoring a statutory demand are severe and can be irreversible. If you do not apply to set aside the demand within 18 days and do not satisfy or secure the debt within 21 days, the creditor may present a [bankruptcy petition](https://windinguppetitionsolicitors.co.uk/bankruptcy-advice/) to the court. If a bankruptcy order is made, you may lose control of your assets including potentially your home to a trustee in bankruptcy, your credit rating will be severely damaged, you may be subject to restrictions on your professional activities, and you may face investigation into your financial affairs by the Official Receiver. Proactive, early legal intervention is by far the most effective and cost-efficient way to protect yourself. If you have already missed the 18-day window, do not assume all is lost, [speak to our specialists urgently](https://lexlaw.co.uk/contact-us/) for advice on late applications and all available options.

## Why Instruct LEXLAW to Set Aside Your Statutory Demand?

[LEXLAW Solicitors & Barristers](https://lexlaw.co.uk/contact-us/) is a specialist litigation law firm based at Middle Temple, one of the historic Inns of Court adjacent to the [Royal Courts of Justice](https://www.find-court-tribunal.service.gov.uk/courts/royal-courts-of-justice) in London. Our team of dual-qualified solicitors and barristers has an unparalleled track record in statutory demand cases, winding-up petition defence, and personal insolvency proceedings. We are able to act at short notice, deploy experienced advocates at every stage, and provide clear, commercially strategic advice.

- 100% success rate on statutory demand and petition cases acted upon to date.

- Dual-qualified solicitors and barristers providing in-house advocacy without the cost of instructing separate counsel.

- Fixed fee initial meetings so you know where you stand from day one.

- Experience across the full spectrum of personal and corporate insolvency proceedings.

Whether your statutory demand has come from HMRC, a bank, a private creditor, or a former business partner, LEXLAW has the expertise, the experience, and the advocacy skills to protect your position. For related matters involving winding-up petitions served on a company, see our dedicated [winding-up petition solicitors practice](https://windinguppetitionsolicitors.co.uk/).

### Frequently Asked Questions (FAQ's)

How long do I have to respond to a statutory demand?
You have 18 days from the date of service to apply to set aside the statutory demand. If you fail to act within this period, the creditor may proceed with a bankruptcy petition after 21 days.

Can a statutory demand be challenged if the amount is incorrect?
Yes. If the amount claimed is incorrect or overstated, this may form part of a genuine dispute. The court will consider whether the dispute is substantial and supported by evidence.

Can I set aside a statutory demand if I simply cannot pay?
Inability to pay alone is not a ground to set aside the demand. However, it may open the door to negotiations, an IVA, or other debt restructuring options. LEXLAW can advise you on all routes available given your specific circumstances.

Does disputing the debt automatically stop bankruptcy proceedings?
No. Simply telling the creditor you dispute the debt does not prevent them from presenting a bankruptcy petition. You must file a formal application to set aside with the court within 18 days. Alternatively, you can apply to have the bankruptcy petition dismissed at the petition hearing itself, but this is a far more complex and costly route than applying to set aside the statutory demand at the outset.

What happens if the court sets aside the statutory demand?
If the demand is set aside, the creditor cannot rely on it to present a bankruptcy petition. However, they may still pursue the debt through other legal routes, such as issuing a claim in court.