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    Guide · England & Wales

    Statutory demands for unpaid business debts

    Updated 27 October 2026 · General information for UK businesses, not legal advice

    When it can work

    • The debt is clearly owed and not disputed
    • It is over the threshold: £750 for companies, £5,000 for individuals
    • The debtor appears able to pay but is ignoring you
    • You are prepared to follow through with a petition if needed

    When it is the wrong tool

    If the customer has raised a genuine dispute, a statutory demand can backfire: the court may set it aside and order you to pay costs. Insolvency is also a collective process. If a company is wound up, your debt joins every other creditor's, and you may recover little.

    The steps

    1. Send a letter before action first.
    2. Complete the correct form (SD1 for a company, SD2 for an individual), including the debt and any statutory interest.
    3. Serve it properly, normally by hand or to the registered office, and keep proof of service.
    4. Wait 21 days. If the debt is unpaid and the demand isn't challenged, you may present a petition.

    A gentler route first

    For most invoices, pre-legal recovery comes first: direct contact, a clear payment request and, where helpful, an instalment plan. This usually recovers the money faster and keeps the business relationship intact. Formal steps are considered case by case.

    Common questions

    What is a statutory demand?

    A formal written demand for payment of a debt. If it is not paid, settled or challenged within 21 days, the creditor can petition to wind up a company or make an individual bankrupt.

    What is the minimum debt?

    To petition after a statutory demand, the debt must be at least £750 for a company and at least £5,000 for an individual.

    Can a statutory demand be used for a disputed debt?

    It shouldn't be. If the debt is genuinely disputed on substantial grounds, the court can set the demand aside or dismiss a petition, and the creditor may have to pay costs.

    How long does the debtor have?

    21 days to pay or reach an agreement. An individual can apply to set the demand aside within 18 days; a company can apply for an injunction to stop a winding-up petition.

    Is a statutory demand the same as a court claim?

    No. It isn't issued by a court and doesn't produce a judgment. It is a step towards insolvency proceedings, which makes it serious, but it is a pressure tool rather than a way to get a judgment.

    Unpaid business invoices?

    HeyEngage Collections handles the chasing and keeps you informed. Fees agreed before work starts. No collection, no fee on eligible cases.

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