Key facts
- Against a company: a debt above $15,000 and 3 weeks to pay after the demand is left at the registered office (IRDA s 125(2)(a)).
- Against an individual: a bankruptcy application needs debts of at least $15,000 (IRDA s 311).
- An individual has 21 days to pay and 14 days to apply to set the demand aside, or 21 days if served outside Singapore.
- A bankruptcy application based on the demand must be filed within 4 months of service.
- A genuinely disputed debt is the wrong case for a statutory demand: the court can set it aside or stop the winding up.
What a statutory demand is
A statutory demand is a written demand that sits under the Insolvency, Restructuring and Dissolution Act 2018 (IRDA). It is not a court order. Its power comes from what follows if the debtor ignores it: the law presumes the debtor cannot pay, and that presumption opens the door to winding up a company or making an individual bankrupt.
Because the next step is insolvency, a statutory demand is a serious tool. Use it for a clear debt that the debtor simply is not paying. It is not a way to settle an argument about whether money is owed.
Statutory demand against a company
Under section 125(2)(a) of the IRDA, a company is deemed unable to pay its debts if:
- it owes the creditor a sum exceeding $15,000 that is already due;
- the creditor, or the creditor's lawfully authorised agent, serves a written demand by leaving it at the company's registered office; and
- for 3 weeks after service the company neglects to pay the sum, or to secure or compound for it to the creditor's reasonable satisfaction.
Once the 3 weeks pass, the creditor can apply to the High Court to wind up the company on the ground that it is unable to pay its debts. The demand is one route to that presumption. The IRDA also accepts an unsatisfied enforcement of a judgment, or other proof that the company cannot pay.
The courts list a deposit of $10,400 to the Official Receiver and a $75 fee to file a winding up application, plus other filing charges. If the court makes a winding up order, a liquidator takes over the company's assets, and no action can be started or continued against the company without the court's permission.
Statutory demand against an individual
For individuals the demand leads to bankruptcy. A bankruptcy application needs debts of at least $15,000 in total, for a fixed sum payable now (IRDA s 311). The demand is prepared in the form set by the Personal Insolvency Rules (Form PIR‑2) and states the exact amount, any interest claimed, and how the debt arose.
| Step | Time limit |
|---|---|
| Debtor pays or settles | Within 21 days of service |
| Debtor applies to set the demand aside | Within 14 days of service, or 21 days if served outside Singapore |
| Creditor files the bankruptcy application | After the 21 days, and within 4 months of service |
Personal service comes first. Only if that fails can the creditor use other methods, such as leaving it at the debtor's home or business or sending it by registered post. Before filing for bankruptcy, the creditor also needs written consent from a licensed insolvency practitioner to act as trustee. The courts list a $1,850 deposit to the Official Assignee and a $60 filing fee.
Setting aside a statutory demand
An individual who disputes the demand can ask the court to set it aside. The court only does so for valid reasons, such as:
- a counterclaim equal to or larger than the debt;
- a dispute over the debt on grounds the court sees as substantial;
- the creditor holds security for the debt and the demand ignores it; or
- the security is worth at least the full debt.
If the application is dismissed, the demand stays valid and the creditor can go ahead. A debtor who misses the 14 day window can ask the court for an extension.
When a statutory demand is the wrong tool
Do not use a statutory demand for a debt that is genuinely disputed. For an individual, a substantial dispute is a ground to set the demand aside. For a company, the Court of Appeal has said a debtor company need only raise triable issues to obtain a stay or dismissal of a winding up application (AnAn Group v VTB Bank [2020] SGCA 33).
If the other side has a real argument about quality, scope or the amount, the usual route is a claim: the Small Claims Tribunals for smaller amounts, or a court claim with a lawyer. A letter of demand often comes first and costs far less.
Who prepares it and what happens after
The creditor or its authorised agent can make the demand. Because the contents and the method of service follow set rules, creditors commonly use a lawyer for this step. After the deadline passes, the creditor decides whether to apply to wind up the company or for bankruptcy, or to accept a payment proposal instead.
Where a debt collection company fits
Speedy is a debt collection company, not a law firm. We do not prepare or serve statutory demands, start court cases or give legal advice. What we do is the work before and around them: contacting the debtor, keeping a written record, and pressing for payment or a signed payment plan through our debt recovery service. If the debtor still will not pay, you have a clean file to hand to your lawyer.
Sources
- Insolvency, Restructuring and Dissolution Act 2018
- Judiciary: Serve a statutory demand on a debtor
- Judiciary: Respond to a statutory demand
- Judiciary: How to file for bankruptcy against another party
- Judiciary: Company winding up
- AnAn Group (Singapore) Pte Ltd v VTB Bank [2020] SGCA 33
- Insolvency Office: About liquidation or winding up