Archive for the ‘Civil Law’ Category


Monday, April 2nd, 2012

What is a Statutory Demand?
When properly served, and it has to be formally served, this is a legal notice from the creditor to the debtor giving them 21 days to settle the debt otherwise a bankruptcy petition may be issued
View a statutory demand as a warning shot. Generally the courts have frowned on Statutory Demands as a method of debt collection. In many case with consumer as opposed to commercial debt the creditor does not pursue the bankruptcy route BUT if the Demand is served on you personally, that is by a process server as opposed to by post the take it very seriously indeed. The same applies if the demand was attempted to be personally served but wasn’t successful.

Who can Issue a statutory demand?
Anyone can – it is not a document that is issued at Court, generally they are held on Debt Collectors computers and just filled in with your details. It is not even a requirement to serve one before a bankruptcy petition is issued, but it does make the creditors life easier if one is served.

Legal Loophole in a Statutory Demand
A statutory demand must show a named person or persons from the Creditor or their agent/solicitor whom you can contact directly. This is Rule 6.2 of  The insolvency Rules 1986.

This means that if the statutory demand doesn’t give the name of a person you can speak to then it is not valid. If you try to contact the named person and they won’t put you through then it is also invalid.

Be aware that named people on accompanying letters are not part of the Statutory Demand – only those on the Demand itself are valid.

Important – make notes of dates/times you try to call the named person on the statutory demand, together with the name of the person that you spoke to and a note of what was said. Write and confirm everything said by Special Delivery.

When to worry about a Statutory Demand
Providing it has been served correctly you must treat it as a matter of urgency. Especially if the person/business behind the demand:

Is willing and able to take you to court to recover their monies
Is upset with you and the threat is more emotionally based than financial
Knows that the attempt to make you bankrupt will affect your professional reputation (all bankruptcy hearings are public knowledge, regardless of outcome)

How to prevent a statutory demand escalating to a bankruptcy petition

Reduce the debt owed to the creditor to below £750 (The legal minimum amount owed that can result in a bankruptcy order)
Apply for the demand to be set aside but only if you have proper grounds
Make an offer to settle or compound  the debt/s  to the creditors satisfaction.(For example offering some security).


Judgement in Default

Saturday, July 24th, 2010

Failure to file an acknowledgment or a defence within the time limits laid down in the CPR may result under Part 12 in the claimant entering judgment in default, that is, judgment without a trial of the claim.

If the Part 8 procedure is being used, Part 12 does not apply (r. 8.1(5)), but a defendant who fails to file an acknowledgment will be unable to take any active part in the hearing without the court’s permission (rule. 8.4).

There are two mechanisms under the rules for entering default judgment, which apply to different types of claim:

(a) A simple request-for-judgment procedure under Part 12 is available in money claims (r. 12.4(1) ), which include claims for specified sums, claims for unquantified damages and some other types of claim. Under this procedure, judgment is entered over the counter on filing a request for default judgment, without any consideration of the merits of the claim.

(b) In a claim for a remedy other than a money claim, in a claim only for costs (other than fixed costs) and in certain other cases set out in r. 12.10, an application for judgment must be made using the Part 23 procedure (see chapter 32). On an application for the entry of a default judgment there will be a hearing and the court will give such judgment as it appears to the court that the claimant is entitled to on his statement of case (r. 12.11(1) ). In this case, then, the court will, in a limited way, consider the merits of the claim. In the overwhelming majority of cases, default judgment is entered simply upon filing a request in the appropriate form.


Charging Order – How to apply

Monday, April 12th, 2010

There is a two-stage process for obtaining charging orders.

(Civil Practice (Blackstone’s):
Stage I
The first stage is to apply for an interim charging order by issuing an application notice using form N379 containing the information prescribed by PD 73, para. 1.2.

The required information includes details of the judgment debtor, the judgment, and the property which it is intended to charge. The application is considered, without a hearing, by a judge who will consider making an interim order and fixing a hearing to consider making a final charging order (CPR, r. 73.4).

If the interim order relates to land, it is usual, as a precaution, to register it as a pending action under the Land Registration Act 1925 or the Land Charges Act 1972 before it is served on the debtor. At least 21 days before the final hearing (which is the second stage) the judgment debtor, such other creditors as the court may direct, and certain other specified persons must be served with the interim charging order, application notice and any supporting documents (CPR, r. 73.5(1)).

Service of an interim charging order effectively prevents dealings with the assets charged pending the final hearing (r. 73.6).

Stage II
The second stage is the hearing to consider making the order final. If service of the interim order was effected by the judgment creditor, a certificate of service must be filed at least two days before the final hearing, or produced at the hearing (r. 73.5(2)).

Any person objecting to the order being made final must file and serve written evidence setting out the grounds of the objection not less than seven days before the hearing (r. 73.8).

At the hearing the court may make a final charging order, discharge the interim order, decide any issues or direct a trial of any issues (r. 73.8(2)