You have up to 18 or 21 days to reply to the statutory demand, depending on what you want to do, from the date the demand was served on you. When a document is ‘served’, it means that it has been delivered to you in the correct way. The creditor may serve a statutory demand on you personally, by first class post, by putting it through your letterbox or by advertising in the newspaper. If the demand is served by post, the date of service is usually two business days after the date of postage. 

If you agree that you owe the money and are not disputing the claim, you could try to negotiate with the creditor that served the demand, get in touch with the creditor, or solicitor, that sent it as soon as you can. Try to negotiate with them within the 21-day time limit, considering the following:

• Offer a realistic repayment proposal - the creditor may not agree to your proposals and does not have to accept

• Taking out a loan, is not always the best advice, but if it is affordable, to pay this and possibly other debts it may be an option. You should seek independent financial advice if you are considering this as an option 

• Offer a voluntary charge against your property. This would mean the debt is then ‘secured’ (like a secured loan or mortgage). You should seek further advice if you are considering this. 

• Reduce the debt to below £5,000. This will mean that the creditor cannot take further steps to make you bankrupt.

• You may have other debt and may be able to consider an individual voluntary arrangement (IVA). This is a formal arrangement to pay all or part of your debts to your creditors by instalments. 

The rules about statutory demands for limited companies and partnerships differ.

If you have a valid ground you may be able to apply to have the statutory demand set aside. You should apply to the court within 18 days of the demand being served.

You could seek to set aside the statutory demand because;

• You have a claim against the creditor which is equal to, or more than, the debt

• The debt is secured against property that is worth the same, or more than, the debt. (Your creditor does not have to accept an offer to secure the debt)

• The whole debt, or the unsecured part of the debt, is below £5,000

• The debt is disputed and the court believes there are reasonable grounds for dispute (including where the creditor is outside time limits, or the debt is regulated by the Consumer Credit Act 1974 and there is no signed agreement) 

• The court is satisfied the demand ought to be set aside (for example when the debt is subject to a court judgment with instalments and you have missed a payment. This would be subject to the courts discretion)
  
  

The court will only set aside the statutory demand if one of these grounds applies. A statutory demand is unlikely to be set aside for a minor matter, for example if the amount claimed is slightly wrong.

When you apply to set aside a statutory demand you should; give your personal details so that the court can identify you, explain you are wanting the demand to be set aside and on what ground you are relying, the date of the statutory demand and the date you became aware of the statutory demand, include a copy of the demand and any other relevant information, and sign and date the application.

If you have not shown that there is a good reason for your application, or not included all the information required, you risk the court dismissing the application without a hearing. Alternatively the court will set a date, time and place for a hearing. 

It is possible for a creditor to make you bankrupt without using a statutory demand. For example, if a creditor has a county court judgment which they have been unable to enforce, they can make you bankrupt without sending you a statutory demand first. 

Also, if you have set up an individual voluntary arrangement (IVA) to deal with your debts and it fails, the insolvency practitioner or creditors could make you bankrupt without sending you a statutory demand.