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  #1  
Old 10-06-2007, 02:34 PM
Lefty Lefty is offline
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Default What is a 'Statutory Demand (SD)??

Upon issuing a statutory demand, the creditor can follow it up 21 days later with a bankruptcy (individual) or winding up (company) petition. A Statutory Demand no matter how easily dismissed, triggers a domino effect on borrowing and many other agreements.

The usual words in any legal agreement, (HP, Mortgage etc) which entitles a creditor party to avoid/cancel the agreement often, refer to the issue of a petition rather than an order for winding up.

Therefore the mere issuing of a demand could cause other creditors to demand immediate payment failing which they will join in the bankruptcy petition.

Of course this assumes they know about it & it might be in your interests to advise the original petitioner that if they intend to proceed you intend notifying your other creditors thereby leaving little or nothing for them to recover.

The procedure for issuing a SD is easy to follow. All that is needed are a couple of forms and a first class stamp; no solicitors, no court fees.
The requirements for a statutory demand are set out in the Insolvency Act and although they are not complicated they have to be followed very carefully. In other words 'followed' to the letter

A statutory demand under section 268 must be dated, and be signed either by the creditor himself or by a person stating himself to be authorised to make the demand on the creditor's behalf.
a) The statutory demand must specify whether it is made under section 268

b) (debt payable immediately) or section 268(2) (debt not so payable).

c)The demand must state the amount of the debt, and the consideration for it (or, if there is no consideration, the way in which it arises) and:

d)if made under section 268(1) and founded on a judgment or order of a court, it must give details of the judgment or order, and:

e)If made under section 268(2), it must state the grounds on which it is alleged that the debtor appears to have no reasonable prospect of paying the debt.

If the amount claimed in the demand includes-
a) Any charge by way of interest not previously notified to the debtor as a liability of his, or-
b) Any other charge accruing from time to time.The amount or rate of the charge must be separately identified, and the grounds on which payment of it is claimed must be stated.In either case the amount claimed must be limited to that which has accrued due at the date of the demand.If the creditor holds any security in respect of the debt, the full amount of the debt shall be specified, but:
a) There shall in the demand be specified the nature of the security, and the value which the creditor puts upon it as at the date of the demand, and:
b) The amount of which payment is claimed by the demand shall be the full amount of the debt, less the amount specified as the value of the security.

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:
b)The affidavit must have exhibited (attached) to it a copy of the demand as served.
c)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.
d)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.
e) 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:
f) Give particulars of the steps which have been taken with a view to serving the demand (personally), and:
g) State the means whereby (those steps having been ineffective) it was sought to bring the demand to the debtor's attention, and:
h) 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.
i) 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.
j)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.
k) 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:
(c)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).
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Last edited by Lefty : 10-06-2007 at 02:54 PM.
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  #2  
Old 10-06-2007, 02:44 PM
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I just knew what the bank called a Statuatory Demand was not one. they were trying to scare tactics and it backfired on them badly.
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Old 12-06-2007, 08:01 PM
Bakedalasker Bakedalasker is offline
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Apparently 90% of SD's are scare tactics.

Another issue to consider is that a SD should only be issued if the debt is DEFINATELY owed. Now this is were I do believe consumer sites like this can have a role to play.

On SNTY there is a DCA who issue SD's. They are genuine SD's as they have made some of our users bankrupt. So this DCA is the real Macoy but I reckon they should not be allowed to do this. Why?

Most of the CCA contracts signed by our users are all the same except for the figures. These contracts have a number of legal arguments against them. This has caused this DCA to "set aside" the SD's. So the debt is definatley NOT owed. Why would they set aside the SD.

Now we at SNTY know that they have issued these SD's against this contract knowing all about these legal arguments. Basically what they are doing is hoping the debtor is scared enough to pay up or if they have to make them bankrupt the debtors solicitor will not know about these legal arguments. Basically getting a judgement through the back door.

Fortunately a number of users have found SNTY all have manged to get their SD's set aside. Unfortunately some were too late in finding us. So now yo ucan see where sites like this can play a major part.

Sadly the governing authorites like the DTI have not been much use. I have reported this practice of the DCA to my MP. He in turn approached the DTI who in turn sent me an automated flob off e-mail. A number of our users have had the same e-mail and it does not install confidence in you.

I am not letting this go and I am looking at other ways. I will find a way and when I do I'm going for the throat.
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Old 12-06-2007, 08:26 PM
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These tactics have to be stopped. I reported ours to the FOS. the bank told them it hadn't happened so I sent the letter with my comments scrawled over it, (sent photcopy back to bank) I had even written F"""wits in very large script on the top of it, I was so angry when we received it. i knew it wasn't a real SD because it had not been stamped by the Court. Thank goodness I am beyond being frightened by these clowns
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Old 13-06-2007, 12:38 AM
Lefty Lefty is offline
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The best place to report them is to HMCS & the High Court Registry particularly if it's one particular DCA who are using this tactic in the full knowledge the debts are either in dispute & may not be owed.

When using an SD to enforce a debt they are signing a 'Statement of Truth' to that effect which if untrue is perjury.

In addition as the issuing of an SD can have serious repercussions for the recipient right from the outset. In other words as the simple act of issuing an SD can have drastic consequences for the alledged debtor there will be very strong grounds for seeking additional compensation for defamation from the DCA.

I really don't think these DCA's have considered this risk.

As I have said before given enough rope they WILL hang themselves
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Last edited by Lefty : 13-06-2007 at 09:52 PM.
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Old 13-06-2007, 07:34 AM
Bakedalasker Bakedalasker is offline
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Well these are routes I knew nothing about and would like to know more. Sadly I have lost confidence with government organisations who seem to take little interest, flob you off with some confidentiality practice then you never hear from them again. Months even a year later the DCA is still doing the same thing.

I am open to any other idea even if it is a government one. One day one will take action. Of course there is the civil side to things but we know what that can cost. Sometimes though that becomes your only choice to seek justice and lets just say it is getting close to that choice.
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Old 13-06-2007, 08:13 AM
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BA,

I think the government organisations are just too weak or lack the will to take punitive action against these companies. All it will take is one DCA to be have their licence revoked and heavily fined , the rest will thensoon fall into line. it's a matter of lighting the fuse under the relevant government authority
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Old 13-06-2007, 09:48 PM
Lefty Lefty is offline
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If they lie to the court no one, Government or otherwise is needed nor can save them. I refer to advising the authorities if it's noticed that a particular Creditor/DCA is prone to this practice.

Even the OFT couldn't ignore such a finding & must consider their fitness to hold a CCL
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Last edited by Lefty : 13-06-2007 at 09:50 PM.
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Old 14-06-2007, 07:47 AM
Bakedalasker Bakedalasker is offline
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Thats what I have done via my MP. At the same time one of our other users on SNTY complained to them on another matter. Both of us received the same reply word for word by the same person. We are referring to the DTI here and our complaints were against a DCA.

Well neither of us have heard anything from the DTI. No news is good news perhaps. These organisations are not the fasted of people so we have to life with that but how long do you have to wait?

We at SNTY have been complaining to the OFT about this DCA for the last 2 years. I would hate to think how many complaints have gone their way. Excluding the flob off replies what responses have our users heard, nothing.

We dont know if they have taken further action or not. If they have then you can understand the qiuetnest. If they have found the DCA not guilty then you would expect them to inform the complainant. As we have heard nothing then you can assume they are still investigating but after 2 years??????

Adding to our lack of beleif in these guys I actually PMed one of them from our site. Now we have a number of OFT members on our site who were fairly active advising our users to complain to the OFT about this DCA. They even left e-mail contacts for our users. Obviously they were aware of this DCA. After a year of encouraging our users otdo this then hearing nothing I took the initiative and PMed one of these guys. I basically asked what was going on. He replied "we cannot act on individual cases but MAY BE forwarded to our market study team for their further consideration". Well that really installed confidence in me NOT.

One of our well known users in the early days shared his story where this DCA caused him to re-mortgage his house to pay the "debt". The DCA used the SD tactic to scare him. Knowing what we know now we have been looking at ways of getting re-imbursement for this guy. The only way forward we can see is civil litigation. We all know the risk and cost there.

Gone on a bit again. I'm open to any other ideas people can think of.
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  #10  
Old 14-06-2007, 12:06 PM
Lefty Lefty is offline
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The DTI otherwise have been known for many years as the

'Department of Timidity and Inaction'
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