Statutory Demand Issued

[AntelopeBoy]

Hi,

I have been issued a Statutory Demand for payment of a CCJ, but I have recently applied for an application to vary. This was granted and I am paying it back monthly, and have not missed any payments.

Could/should I apply to have the demand set aside on the basis an order to vary has been granted? Will this be considered enough reason to set it aside?

[Snoopy1948]

Re: Statutory Demand Issued

Hi ... I would have thought that any reasonable reason to have the Stat Demand set aside would be the first action. Is your creditor actually aware that you are making payments under the court variation? Statutory Demands tend to be the start of a chain of negotiation and any reasonable and committed offer to repay should never be discounted. I cannot imagine any judge making you bankrupt when monthly payment is being made but the offer must be reasonable within your own status and not derisory.

[AntelopeBoy]

Re: Statutory Demand Issued

Hi, thank you so much for replying, to say I've had a few sleepless nights is an understatement!

The creditor knows, but the problems, and the creditors arguments are two-fold:

Firstly, the application to vary was granted based on the income of my partner and I. I do not work, my partner does and is the sole income, I do not have an income. The debt is solely in my name, so the creditor has argued that solely my financial position should be considered. No income means no steady payment in their eyes and they have put forward a whole list of scenarios including divorce, partner losing their job, all sorts which could affect my repayment.

Secondly, the debt is very high, several thousand pounds. Paying the amount I can realistically afford will mean it will take close to 30 years to pay back, as the amount I can afford barely covers the interest. the creditor is arguing that this means I cannot realistically pay the debt, the key point in their potential bankruptcy petition.

I'm sick with worry. Because I am on the legal owner of both our family home and a rental home, technically I have assets which would cover the debt, but not immediate cash. My main worry is I will be made bankrupt because the only way to pay the debt will be to sell my property. Can the court force this?

[Crazy council]

Re: Statutory Demand Issued

hi

how much is the total ( just approx will do ) . whats the history of payments with the creditor

[AntelopeBoy]

Re: Statutory Demand Issued

Hi,

The debt is around £8,000, I can afford £75/month at a stretch

[Snoopy1948]

Re: Statutory Demand Issued

Hi again ...

It would be interesting to know what type of debt this is as clearly some debts can be reasonably prioritised up and above others, in terms of your responsibility to repay. You say that you legally own two homes, both a family home and a rental property. Is that correct? Does that therefore mean you have a rental income? Please don't be offended by what I say, but it is easy to understand how a creditor chasing £8000 can be persuaded to take the insolvency route when you appear to be asset rich and their somewhat large debt is going to take years to settle, especially if there was an element of neglect of irresponsibility in accruing the debt ( this is particularly applicable to credit card debts ). I cannot imagine that you would be successful in requesting the action to be set aside, unless you truly do not owe it or any of the details of the claim are clearly wrong.

AS to selling one of your properties being forced by the court to settle such debts, my understanding is yes. You can offer to accept a property charge to secure the debt which still does not represent or ensure repayment. However, I assume that a charge has already been made?

Since you are not going to be granted a commercial loan for £8000 to settle this matter, you can only look towards family and friends to help you raise the money, that's assuming that such people are available. Any private loan would have to be given, I suggest, on their own application for a property charge, to offer some security in their lending, even if it is a family member helping out here. However, best advice is never to replace one debt with another unless the consequences dictate it, i.e. you are about to lose your home. But having said all of that, again you state that you do not have an income, hence the creditor's service of a statutory demand to increase pressure of repayment. Not all creditors will decide to take non settlement under a statutory demand to bankruptcy as they have to pay the costs up front which may approach a thousand pounds. However, you are asset rich and they may decide insolvency is the best form of action. I know this is not good news for you but creditors are becoming more steeled towards recovering debts sooner rather than later.

Have you sought any independent advice on this matter, i.e. the Citizens Advice Bureau ( as a starting point )?

[AntelopeBoy]

Re: Statutory Demand Issued

Hi,

No offence taken, I realise that I am in a very serious situation here, with a debt that will have to be paid regardless. It is my own fault the debt has come about, I didn't protect a tenant's deposit correctly and they claimed against me and won.

Yes, you are correct, two properties, the family home and a rental property. There is a rental income but his only just covers the mortgage payments. It is a long term investment rather than a source of immediate income.

No charges have been made; a hearing of the application to vary is in February, there is an interim order currently for £75/month. My biggest worry is that at the hearing the judge agrees that as it is my debt only my income should matter. If this happens then I will not physically be able to pay anything and be left no way of paying other than selling belongings or maybe even properties. Is there any way I can ask the judge to consider my partner's income as mine?

I have taken some legal advise, but their advice was basically "sell the second property and use any equity to pay". I really don't want to though as like I said, it is an investment for my children, not a source of income.

[Snoopy1948]

Re: Statutory Demand Issued

Hi again ... thanks for the additional information!

I appreciate the difficult situation that you are faced with here and the frustration of limited avenues to go down. I spent 23 years as a local authority revenue enforcement officer and I have met just about every situation there is. The problem as I see it is the financial responsibility to a single and individual creditor on the back of limited cashflow. I really don't know how much sway the judge would have but do I gather at the hearing in February you will be requesting a reduction in payment ( as the application to vary )? It seems to me that the service of the statutory demand is independent of the interim order to repay the CCJ so that suggests that the claimant urgently needs that money back so if that is so, the statutory demand may proceed independently. The claimant can only proceed to insolvency providing they stump up the bankruptcy fee which is not insubstantial. Many creditors are not willing to risk the fee on the basis of little success but you cannot guarantee that.

Have you written to the court named in the Stat Demand to detail your financial circumstances and stating a firm offer of repayment?

The legal advice offered of selling the rental property is to be expected and does drive home your responsibilities here. Sometimes it's good to put yourselves in the position of your creditor and ask yourself what you would want from the situation. There may be some anger from the claimant based on their need to claim against you and win their case.

As I have said before, do you have any other sources of borrowing this money? Perhaps offering your claimant a fair up front contribution, lump sum wise, may be acceptable backed up with the balance in instalments. Whatever, I suspect that you are going to have to raise monies to get this ball rolling. Your troubles will intensify once the claimant goers beyond the stat demand and applies, if they do, for your insolvency.

[AntelopeBoy]

Re: Statutory Demand Issued

hi again, thank you so much for your continued help here.

So the original order was that I had to pay the full amount in 14 days as it was a "penalty" or "fine" issued by the court rather than a debt. Obviously I did not have access to that amount, so I made an application to vary, requesting that I be allowed to pay £75/month. The creditor had me questioned in person by the court, but I was not prepared to give details of joint details with my partner as the debt does not concern them, only me. This is when the creditor began their line that my application to vary my debt should be judged on my income. At a hearing in December the judge put the hearing back to Feb as he was unsure if he could grant an application to vary; apparently that power is granted by the County Court Act, and he was unsure if this superseded the Housing Act which stated the 14 day payment period.

I'm just really worried tat come February the judge will agree that £75 doesn't pay the debt back quickly enough, and cannot be agreed because I have no income. Can a judge just outright refuse the application, leaving myself open to other forms of enforcement? That is my biggest concern.

[Snoopy1948]

Re: Statutory Demand Issued

Hi again ....

I think the important things to consider here is that you agree that the debt arose through poor administration of your rental property and that the tenant is fully entitled to the return of that money and without delay. I, for one, would not accept £8000 of my money to be repaid over a potential nine years or longer. I appreciate that's a hard look at it but you have to see it both from the claimant's view and that of the judge.

Remember this is only at Statutory Demand stage which as I have said, and as I see it, is a different action to the CCJ and its variance. If your financial income and expenditure shows that you cannot afford more than £75/month, then reasonably that may be acceptable. However, it is hard to forget that you have two properties in legal title and you have neglected your responsibility to a previous tenant ( I assume ). The obvious question must spring to mind as to what happened to the £8000 in question as clearly it was spent elsewhere? Failure to protect that amount was something that should never have happened and I can only guess that the tenant concerned continues to simmer! Sometimes being totally open in admitting the 'offence' and remaining humble can help but it depends on whose ears it falls on!

I apologise for sounding unsympathetic on this case, I am not, but I have had many years at giving opinion to local authorities about how we should proceed in debt cases. I suggest you can only wait on the results of the February hearing and take it from there. The Stat Demand is a separate action and failure to comply with that can only result in an application for your insolvency which would prompt the intervention of the Official Receiver and him looking at opportunities to liquefy your assets to clear the debt in question.

Your only real safeguard here is to try and realise the money or certainly a large percentage of it at this point. I would be interested to know the outcome of the 'vary' hearing or indeed any further action on the Stat Demand.

[AntelopeBoy]

Re: Statutory Demand Issued

Hi,

Sorry, I think there has been a misunderstanding, the original deposit was just over £1,000, the rest is a fine for not protecting the deposit correctly (the information I gave the tenant was not complete). a court have already made the order that I have to pay £8,000.

The £8,000 is made up of: return of the deposit (£1,000), the fine for not protecting (approx £6,000) and costs (approx £1,000). A vast portion of the amount was never theirs to begin with.

The creditor has issued a Statutory Demand as they have made it clear they don't want to do things properly, they just want to bankrupt me by not enforcing the debt properly. surely they cannot do this?

[Amethyst]

Re: Statutory Demand Issued

As Snoopy says the debt is at court awaiting a hearing for an installment order, you have an interim order to pay £75 a month which you are keeping up with. I wouldn't think they can enforce via statutory demand whilst that is ongoing. I'll see if [MENTION=2]Celestine[/MENTION] or [MENTION=551]pt2537[/MENTION] can look in and give you the definitive answer on that though. You are completing the set aside forms for the stat demand - those need to contain the details of the ongoing court proceedings.

If it is decided the Housing Act overrules the CPR and you have to pay £8k forthwith, then selling your 2nd property and using the equity to pay off this debt is a vastly better option than going bankrupt.

[Snoopy1948]

Re: Statutory Demand Issued

Hi again .. yes the power of assumption can lead the conversation astray! Hence the need for a comprehensive fact find before any opinion. Apologies for the incorrect assumptions.

Yes, this truly is a bit of a bummer, so to speak. I can understand that while you have broken the law, the penalty appears to remain excessive.

Two questions :

(1) Were you unable to pay the tenant back his £1000 to expedite the matter?
(2) Did you challenge the courts ability to fine you six times the deposit as I am reading that between 1-3 times is the norm? Have you taken specific advice on this or have you at any time challenged the severity of the fine?

I am also reading that tenants who fail to have their deposit protected can 'chase the compensation bandwagon' to simply make some money soI have some sympathy for you there.

Why do you feel that your creditor is 'not doing things properly' or indeed 'not enforcing the debt properly' by serving a statutory demand against you? Remember that a CCJ is just a courts recognition that you owe the money but is never a guarantee of repayment. Perhaps you could have it set aside on the basis that the balance of £8000 is unfair to enforce in this matter as it represents some 800% of the original debt and you would wish to commit repayment at £75/month until clear. It is a shame that you cannot pay this £1000 up front leaving the penalties to be cleared by arrangement.

As I said, a bit of a bummer and clearly the law of the land is taking a very severe line here!

[AntelopeBoy]

Re: Statutory Demand Issued

Please, given all the help you have offered there is no need to apologise.

In answer to your questions:

1) No, the deposit had been spent having the house redecorated. As the deposit was not correctly protected the judge ordered it be returned saying I had no right to it due to my failure to comply with the law
2) I did, the total amount was the total of four penalties; because I did not protect the deposit correctly to begin with the Deregulation Act passed last year was not triggered, and each tenancy period was counted as a separate punishable breach.

I was under the impression that the creditor cannot enforce the judgement if I make an offer to pay?

[Snoopy1948]

Re: Statutory Demand Issued

Hi again ....

You have indeed suffered here! I am assuming that remedial works were necessary following the tenancy that were ignored and over-ridden by the Judge's opinion that you failed to protect the deposit?

Have you made application to have the Stat Demand set aside on the basis that you have an interim order to repay that is being maintained ( see Amethyst's reply above )?

That seems the best option for now.