What is the difference between disputed debt and good debt in a statutory demand?

Disputed debt in a statutory demand is when a creditor attempts to claim debt that the debtor claims is not owed to them, therefore they are not insolvent.

A good petitioning debt is when the debt is in a liquidated form - which is both specific and agreed - for immediate or future payment whilst the debtor cannot afford to pay the debt.

What are the necessary steps to take when an individual is served a disputed statutory demand?

One option is to contact the creditor to dispute the statutory demand, which will lessen costs for both parties, however a statutory demand must be responded to within 21 days, therefore this could be problematic if a response is not received from the creditor within this time frame.

If no response is received from the creditor, then the next step is to submit an application to the appropriate court (Usually the court that set out the statutory demand itself) to set aside a statutory demand under the recent Insolvency Rules (6^th April 2017).

What is the minimum amount of demanded debt in a statutory demand?

For corporate debtors the minimum amount is £750.

For individual debtors the minimum amount is £5,000 – Under the Insolvency Act 1986 (Amendment Order 2015) which was revised on 1^st October 2015.

Although the sum of £750 still applies to bankruptcy petition prior to 1^st October 2015.

The most recent Insolvency Rules (IR) came in to place on 6^th April 2017, with the intention of modernising and streamlining the initial process. This involved cutting costs on insolvency, as well as consolidating previous amendments, and ensuring that the language used is both modern and gender-neutral for the people of England and Wales.

Under the Insolvency Rules 1986 (Amended on 6^th April 2017) came the abolition of statutory forms, which were replaced by specific forms, where prescribed information could be contained.

The changes to the new IR include: