How to stop a statutory demand?

A statutory demand is the first step towards insolvency. If a statutory demand isn’t addressed properly the next step for a company debtor would be for the creditor to petition to wind up the company. For an individual a bankruptcy petition might be issued by the creditor. Both a company and an individual can prevent a statutory demand from going further by reaching an agreement with the creditor. If monies are owed and admitted then a payment of the debt should prevent any petitions being issued. Alternatively if security is offered (for example a charge against assets) or if the debtor has a counterclaim, a bankruptcy petition might be defended. Where a statutory demand is received by an individual and there is a genuine triable issue and dispute between the parties the debtor can apply to the court to obtain an order that it be set aside. That will prevent the creditor issuing a bankruptcy petition relying on the statutory demand. In the case of a company a debtor who disputes that the monies owed should obtain either undertakings that the creditor will not present a petition, or apply to the court for an injunction preventing the creditor from issuing a petition to wind up the company. An injunction is a serious and urgent application to the court.