What Is a Statutory Demand in Ireland and How Should You Respond?

A statutory demand is one of the most serious documents a business or individual can receive in Ireland. It is a formal legal document demanding payment of a debt — and if you fail to respond within 21 days, it can be used as evidence of your inability to pay your debts, which is a ground for the court to wind up your company or make you bankrupt. This guide explains what a statutory demand is, what it means, and what you must do if you receive one.

What Is a Statutory Demand?

A statutory demand is a formal written demand for payment of an undisputed debt, served under the Companies Act 2014 (for companies) or the Bankruptcy Act 1988 (for individuals). It demands payment of a debt exceeding €10,000 (for companies) or €20,000 (for individuals) within 21 days.

What Happens If You Don’t Respond?

If you receive a statutory demand and either don’t respond or don’t pay within 21 days, the creditor can use the unpaid demand as evidence that you are unable to pay your debts. For companies, this can be used to present a winding-up petition to the High Court. For individuals, it can be used to present a bankruptcy petition. A winding-up order ends a company’s existence. A bankruptcy order has severe consequences for an individual’s financial life.

What Should You Do If You Receive a Statutory Demand?

Act immediately — do not wait. You have 21 days and the clock starts on the date of service. Your options are:

1. Pay the debt in full — if the debt is undisputed and you can pay it, this is the simplest resolution
2. Reach a settlement — negotiate a payment arrangement with the creditor
3. Dispute the debt — if you genuinely dispute the amount owed or whether you owe anything at all, you can apply to court to have the statutory demand set aside. Grounds for setting aside include: the debt is disputed on substantial grounds, you have a counterclaim exceeding the amount claimed, the demand was served incorrectly, or it would be unjust to allow it to stand
4. Apply to set aside (court application) — for companies: bring an application to the High Court within 21 days

Can a Statutory Demand Be Set Aside?

Yes — Irish courts will set aside a statutory demand where the debt is genuinely disputed. The threshold is whether there is a genuine triable issue as to the liability of the company or individual for the debt. If you have a bona fide dispute, act immediately to apply to set aside the demand before the 21 days expire.

Receiving a Statutory Demand Is Urgent

This cannot be overstated: if you receive a statutory demand, you must get legal advice immediately. Missing the 21-day window can have catastrophic consequences for your company or personal finances. Book a 30-minute consultation with one of our solicitors as a matter of urgency. Also see our Debt Collection service if you need to send a statutory demand yourself.

This article is for informational purposes only and does not constitute legal advice.