Debt Collecting

Lending money is one thing, collecting overdue debts can be quite another matter when the borrower defaults. Writing emails and making calls may work, but when the problem becomes serious, additional steps may be needed, including when the lender's rights under the loan agreement are not working. 

Statutory demands can be a useful tool to help recover debts that are otherwise proving hard to get paid.

Read what Net Lawman says about making statutory demands as a means of recovering money owed and these are their two templates for your use and further below:

Template: Statutory Demand form and notes: service on a company or LLP

"Serve a statutory demand against a company or limited liability partnership (LLP) using this collection of documents."

Template:  Statutory Demand form and notes: service on an individual

"Serve a demand against an individual or a business partnership using this collection of documents."

"A statutory demand is an ancient but still incredibly powerful debt collecting device. The law assumes it merely paves the way for a bankruptcy or winding up petition, but the threat of a petition can spur repayment from even the most unwilling debtor.

Furthermore, the procedure to issue these forms is very easy to follow. Using these forms, the guidance and the letter in this pack you should be able to issue a demand yourself without needing to involve solicitors or pay court fees.

The format prescribed by the law

We provide you with three versions of form 4.1 under section 123(1)(a) or 222(1)(a) of the Insolvency Act 1986.

Some of the text in the forms is laid down in the Insolvency Act 1986, and therefore must be left precisely as it is. We make clear what that is in the guidance notes that we provide with the documents.

Although we provide the forms in a traditional format, the layout is not laid down by law, so we are able to provide our own more user friendly version of the form as well.

When to use

If you are trying to recover debts from an individual or business partnership (but not a limited liability partnership), you can serve the notice on any partner as if you were recovering the debt from an individual. It is usual to choose the most senior partner, but you can pick any. Just make sure you choose a person who does have the wealth to repay you.

If you are trying to recover debts from a company or a limited liability partnership, then you must use the company version of the form.

Statutory demands are not served as often as they could be. A common misconception is that a solicitor is needed to prepare the forms, or that serving one is a difficult process or a certain path to litigation. In fact, in the right circumstances it is a fast and efficient way to collect a debt.

The key is that your debtor has to believe that you will take the process further to make him bankrupt or wind up his company if he fails to pay. We advise that you should take that step if you need to do so, but you will find that in most cases you will not have to go further than a statutory demand. Now consider these points:

  1. By law, the debt must be at least £750. There is no cost or filing or registration necessary.
  2. If your debtor is to believe you will follow up with insolvency proceedings, you have to make him see that it will be worth your while. That means covering the fee on the petition to wind up and adding something to cover the aggravation of litigation. We suggest that the minimum amount that you should pursue is £1,000.
  3. You will not be paid if your debtor truly does not have the money. However, it is amazing how money is found when a creditor really presses hard.
  4. You have to be certain that what is owed is a simple money debt. You cannot issue a statutory demand for a case that could need a judge to decide.
  5. It goes without saying that you should not expect to have an on-going relationship with the debtor.
  6. You should reckon that your debtor is likely to repay you rather than risk his reputation. This is particularly true against large companies, companies where reputation is important to business, and to governmental organisations. (You could not actually wind up the Ministry of Defence, but they would certainly pay you fast if you issued a statutory demand!)"

Detailed guidance notes are provided with each template. Net Lawman offers a money back guarantee if the document is not what you need, as well as a legal review option if you want some professional assistance when you are drawing up your documents.


The documents menus are designed to describe the documents, but please be sure that you check them over carefully to ensure that they do meet your needs. All documents are subject to Net Lawman's Terms and Conditions, which we ask you to read before you purchase any documents.

We are pleased to be supported by Net as a leading independent online provider of ready-to-use legal documents for business users.

Net Lawman is a founding member of the Association of Publishers of Online Legal Documents (APOD).

APOD exists to:

  • promote the sale of online legal and business document templates;
  • educate the public about the need for legal documents to protect their interests, and in the online availability of professionally written and affordable template contracts;
  • promote and represent the interests of the Association and its members;
  • ensure professional standards for customers and the public in accordance with the APOD Code of Practice.

We always welcome your feedback so please do let us know what else you would like to know about using this Form.