Do you need a court judgment before serving a statutory demand?

What qualifies as a demandable debt

The debt must be for a liquidated sum, due and payable, and free of genuine dispute or a cross claim that equals or exceeds it. Unpaid invoices past their terms, loan repayments, and sums due under signed agreements are the classic candidates. A judgment debt qualifies too, and where a creditor already holds an unsatisfied judgment the demand becomes very difficult for the debtor to resist.

The genuine dispute rule is the safety catch

A statutory demand is not a debt collection letter with teeth to be fired at any invoice. Serving one for a debt that is genuinely disputed on substantial grounds is an abuse of the insolvency process: an individual will apply to set the demand aside, a company will seek an injunction restraining any petition, and in either case the creditor faces a costs order. The commercial judgement, usually taken with solicitors, is whether the debt is clean enough to survive that scrutiny.

Why service quality decides what the demand is worth

Because everything that follows runs from the date and validity of service, the demand should be served personally where practicable, by a professional who identifies the debtor, records the encounter and provides the certificate or affidavit that a later petition will rely on. Our answers on personal service of statutory demands and the cost of serving one cover the mechanics and fixed fees.