With effect from 1 October 2015, the Statutory Demand minimum claim limit in accordance with The Insolvency Act 1986 is set to increase from the current level of £750 (originally set in 1986) to £5,000.
This change will clearly affect the successful recovery of debts, as whilst the new limit will be good news for debtors, the increase will certainly not be good news for creditors.
Depending upon the circumstances giving rise to the debt, creditors may consider that letters before action should be sent and followed by the service of Statutory Demands (where applicable) well before the new limit is increased on 1 October 2015. Otherwise, for debts of less than £5,000, the Statutory Demand route (which can be most effective in time and cost for recovering a debt) will no longer be available, and for those debts, County Court proceedings may be the only option.
The above does not of course affect debts for more than £5,000.
If you require more information, please contact Jeremy Hershkorn or any other member of the Litigation & Dispute Resolution Department
The comments expressed above do not constitute legal advice and are for information purposes only. No liability is accepted for the opinion contained or any errors or omissions.