How to prepare a statutory demand – Part 1

Key points

When preparing a statutory demand, the creditor should:

  • Use the relevant prescribed form.
  • Comply with the formal requirements of the IR 1986.
  • Correctly identify the creditor and the debtor.
  • Provide details of the debt, any consideration for it and how it arose.
  • Include details of any interest or other charges that are accruing.

Further guidance on these matters is provided in the sections below.

Formal requirements

Personal insolvency

The relevant rules are rules 6.1 to 6.2 of the IR 1986 and paragraph 13 of PDIP.

One of these prescribed forms must be used:

  • Form 6.1, if the debt is a liquidated sum payable immediately.
  • Form 6.2, if the debt is for liquidated sum payable immediately, following a judgment or court order.
  • Form 6.3, if the debt is payable in the future.

The statutory demand must include an explanation of the following:

  • The purpose of the demand and that bankruptcy proceedings may be commenced if it is not complied with.
  • The time within which it must be complied with if that consequence is to be avoided.
  • The methods of compliance open to the debtor.
  • The debtor’s right to apply for the demand to be set aside, and the court to which any application should be made.

(Rule 6.2(1), IR 1986.)

In addition, the demand must provide contact details for one or more individuals with whom the debtor may communicate with a view to complying with the demand (rule 6.2(2), IR 1986). The relevant individuals may be the creditor himself or a solicitor or accountant.

Corporate insolvency

The relevant rules are in rules 4.4 to 4.6 of the IR 1986.

The prescribed form, Form 4.1, must be used.

The statutory demand must include an explanation of the following:

  • The purpose of the demand and that winding up proceedings may be instituted if it is not complied with.
  • The time within which the demand must be complied with if that consequence is to be avoided.
  • The methods of compliance open to the company.
  • The company’s right to apply for an injunction restraining the creditor from presenting or advertising a winding up petition, and the appropriate court for any application to be made.

(Rule 4.6(1), IR 1986.)

In addition, the demand must provide details of one or more individuals with whom the company may communicate, with a view to complying with the demand (rule 4.6(2), IR 1986).

More guidance on drafting a statutory demand in respect of a company is provided in Drafting note, Compulsory liquidation: statutory demand.