Respond to a statutory demand (from 1 April 2022)

What is a statutory demand

When you owe someone money, they are the creditor and you are the debtor.

As a debtor, you may receive a statutory demand, which is a notice from your creditor demanding payment. It is an important document that may lead to bankruptcy.

The creditor may start bankruptcy proceedings against you if you do not take one of the following steps after receiving the statutory demand:

• Comply with the statutory demand. This usually includes paying the debt.
• (If you choose to challenge the debt demanded by the creditor) Apply to set aside the demand

Ways to respond to a statutory demand

If you wish to avoid bankruptcy, the following are common methods of responding to a statutory demand, which you should carry out within the timeline stated on the statutory demand.

Pay the debt

You can contact the creditor or the creditor’s lawyers and arrange to settle your debt. The contact information of your creditor is listed in the statutory demand.

If you are unable to repay the entire amount, you may try to negotiate with the creditor, for example by proposing to pay the debt in instalments.

You may ask the creditor not to proceed with bankruptcy proceedings in the meantime.

Set aside the statutory demand

Setting aside the statutory demand means making it invalid.

The court may set aside the statutory demand only if there are valid reasons. Examples include:

• You have a valid counterclaim equivalent to or exceeding the amount of the debt stated in the demand.
• You dispute the debt stated in the demand on grounds (reasons) which appear to the court to be substantial.
• If the creditor holds any of your property or security in respect of the debt, but the demand does not take that into account.
• If the creditor holds any of your property or security in respect of the debt, and the court is satisfied that the value of the property or security is equivalent to or exceeds the full amount of the debt.

Refer to Rule 68 (2) of the Insolvency, Restructuring and Dissolution (Personal Insolvency) Rules for more information.

When to file

You must file the setting aside application within 14 days after the date on which the statutory demand was served on you.

Exception: If the statutory demand was served on you outside of Singapore, the time limit is within 21 days.

Tip: If you are unable to apply within this time limit, you can need to apply to the General Division of the High Court for an extension of time. You can include this request as part of your setting aside application.

What you will need

You will need to prepare the following documents:

• An Originating Application (Bankruptcy) (See Appendix A of the Supreme Court Practice Directions 2021 for Form 15 of the Rules of Court 2021).
• A supporting affidavit.
  • Refer to Rule 67(5) of the Insolvency, Restructuring and Dissolution (Personal Insolvency) Rules for more information.

Note: You must swear or affirm the affidavit before a Commissioner for Oaths (CFO). You should only sign the affidavit when you are in the presence of a CFO. Find out how to arrange for CFO services if you are not represented by a lawyer.

Estimated application fees

Refer to the Third Schedule of the Insolvency, Restructuring and Dissolution (Personal Insolvency) Rules for the full list of fees. Examples of some of the fees include:

Note: This table does not include additional fees payable to the LawNet & CrimsonLogic Service Bureau, such as transmission and processing fees for applications filed through the LawNet & CrimsonLogic Service Bureau and its handling fees.

How to set aside the statutory demand

You may choose to file personally or through a lawyer. If you are represented by a lawyer, the application will be filed by your lawyer.

If you are representing yourself, follow these steps to file your application in the General Division of the High Court.

1. File the documents via eLitigation

Visit the LawNet & CrimsonLogic Service Bureau to file your prepared documents.

2. Collect the endorsed documents

The Service Bureau will notify you via email or SMS of whether your application documents have been accepted by the courts.

If the court accepts your application documents, you will be asked to return to the Service Bureau to collect an endorsed copy of the documents. This will include the date and time of a hearing that you must attend.

3. Serve the documents

When: within 3 days after the date of filing

You need to serve your application documents on the creditor within 3 days after the date of filing of the application. This means taking reasonable steps to bring the application to the creditor's attention, and making attempts to deliver a hard copy of the application documents to the creditor in person. This is known as personal service.

Note: If personal service has failed, you need to apply to the court for substituted service.

After you file

The court will schedule a hearing for your application. You must attend the hearing on the appointed date and time.

At the hearing, the court will determine the merits of your application and decide whether to allow or dismiss it.

Tip: If you are unable to attend, you must make a request to change the court date, which is subject to the court's approval.

Outcomes of the application

If your setting aside application is allowed, the statutory demand will become invalid. The creditor cannot proceed to file a bankruptcy application against you based on the statutory demand. (If your reason for setting aside was due to failure to comply with the form and content of the statutory demand, the creditor may serve a fresh statutory demand on you.)

If your setting aside application is dismissed, the statutory demand will still be valid. The creditor may proceed to file a bankruptcy application against you if you do not comply with the statutory demand.

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