How to collect a debt from someone

If you are trying to collect a debt from someone and do not wish to issue County Court Proceedings one alternative way is to commence Insolvency Proceedings. The first step in Insolvency proceedings is to serve a statutory demand, which is a formal demand for the payment of a debt. This demand gives the debtor 21 days to make payment of the debt in full. The debtor is warned that failure to make payment will mean that a Bankruptcy or Winding-Up Petition will be presented.

If the debtor is an individual - the debt has to be over £5000 to take insolvency action. A Statutory Demand would be sent and then a Bankruptcy Petition presented.

If the debtor is a company - the debt has to be over £750 to take insolvency action. A Statutory Demand would be sent and then a Winding-up Petition presented.


  • The threat of Bankruptcy or Winding-Up proceedings can be a powerful incentive for a debtor to pay given the serious nature of insolvency proceedings
  • Preparing a statutory demand is included in our 'No Recovery, No Fee service' - you are only required to pay the disbursements (i.e. court fees) for instructing a process server in advance
  • The preparation and service of a Statutory Demand are quick and inexpensive
  • Can either result in prompt payment of a debt or be useful to highlight any disputes over the debt


  • It is seen as an aggressive step and may have a negative impact on ongoing business relationships
  • It may not result in payment and the next steps would be issuing a County Court Claim or proceedings with the threat and presenting a Bankruptcy or Winding-Up Petition. This is very costly
  • If a debtor can raise an arguable defence to the obligation to pay, then the demand may be set aside and you would have to proceed by way of County Court proceedings

This step should particularly be considered if the debtor is a company and you know that they are in a position to pay their debts.

Our Forbes Collect team can advise you whether a County Court Claim or Insolvency action would be most effective in your particular circumstances contact Forbes Collect on 0800 689 4176 or email us on


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0800 689 4176

01 Nov 2018

Forbes Collect


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