Statutory demand or court claim? Choosing how to escalate an unpaid invoice
Two routes, one of them much faster and much more dangerous. How to tell which one your debt belongs in, and the test that decides it.
21 August 2026 · 5 min read
You have sent the chases, made the calls, and written the letter before action. The deadline has passed. There are two ways forward and they are not interchangeable — one is slow and safe, the other is fast and capable of costing you more than the invoice.
Everything turns on a single question, so start there.
The question that decides it
Is the debt genuinely disputed?
Not "have they said something vague about being unhappy". Genuinely disputed means there is a real argument on substantial grounds about whether the money is owed — the work was not delivered, the amount is wrong, the contract says something else.
- Genuinely disputed → county court claim. The court exists to decide disputes. This is the whole point of it.
- Not disputed, they simply have not paid → the insolvency route is available, and it is dramatically faster.
Get this wrong in the second direction and it is expensive. A winding-up petition founded on a disputed debt gets dismissed, and courts have long treated the insolvency jurisdiction as an improper means of applying pressure in a commercial argument. You can end up paying the other side's costs on the harsher indemnity basis, and facing a claim for the damage an advertised petition did to their banking.
If you are unsure whether a dispute is real, treat it as real.
Route one: a county court money claim
The ordinary way to recover a debt.
What it is. You issue a claim; the defendant has a short window to admit, defend, or ignore it. If they ignore it you can request judgment in default, which is common. If they defend, the claim is allocated to a track and proceeds.
How. Money Claim Online handles fixed-sum claims up to £100,000, against up to two defendants, in England and Wales.
What it costs. An issue fee that rises with the value of the claim, becoming a percentage of it on larger claims. It is recoverable from the debtor if you win. Check the current fee table rather than a figure quoted in an article, because the fees are reviewed periodically.
The catch worth knowing. Claims up to £10,000 are normally allocated to the small claims track, where you generally cannot recover your legal costs beyond limited fixed sums. On a £6,000 invoice, paying a solicitor to run the claim can cost more than you get back. Above £10,000 the calculation changes.
Add the extras. Claim statutory interest and the fixed compensation as part of the sum — they are part of the debt, not a bonus. How to calculate them.
How long. Months, if defended. Weeks, if not.
Route two: a statutory demand, then a winding-up petition
The nuclear option, and much faster.
What it is. A formal written demand for a debt exceeding £750 owed by a company. If the company does not pay, secure the debt, or apply to set the demand aside within 21 days, that failure raises a presumption that it cannot pay its debts — the ground for a winding-up petition under the Insolvency Act 1986.
Why it works. It very rarely gets that far. A company that can pay usually does, because the consequences of a petition are severe and arrive long before any hearing: banks freeze accounts on advertisement, and directors face immediate and personal consequences. The demand itself is the lever.
Why it is dangerous. Everything above about disputed debts. It is also blunt: you are not asking for your invoice to be paid, you are asserting that the company is insolvent. Used against a client who is merely slow, it ends the relationship permanently and can end the company.
When it is right. An undisputed debt, comfortably over £750, owed by a company that is trading and can pay but has stopped engaging with you. That combination is exactly what this procedure is for.
When it is wrong. Any real dispute. Any debtor who is an individual or a sole trader — bankruptcy has a different and much higher threshold. Any company you actually believe to be insolvent, where you are more likely to fund a liquidation than to get paid.
Side by side
| County court claim | Statutory demand | |
|---|---|---|
| Works on a disputed debt | Yes — that is the point | No, and it will backfire |
| Minimum amount | None | Over £750 |
| Debtor can be an individual | Yes | Different route and threshold |
| Typical timescale | Weeks to months | 21 days to the next step |
| Up-front cost | Issue fee, scaling with value | Low to serve, high to petition |
| Risk if you are wrong | Claim fails, you lose the fee | Costs against you, possible damages |
| Relationship afterwards | Damaged | Over |
Before you pick either
Check Companies House. Free, five minutes, and it can change the answer entirely. Overdue accounts, a recently registered charge, a change of registered office, directors resigning, or a notice in The Gazette all say the same thing: other people are ahead of you and the money may not last. In that situation, a payment plan agreed this week is worth more than a judgment in four months.
Work out what you are actually chasing. Invoice total, plus statutory interest to date, plus £40, £70 or £100 per invoice, plus reasonable recovery costs above the fixed sum. The real number is often 5–10% higher than the invoice, which occasionally changes whether it is worth pursuing.
Consider the third option nobody lists. A solicitor's letter, for a few hundred pounds, sits between the letter before action and either route above. It frequently works on exactly the debtor who has been ignoring you, it costs a fraction of either procedure, and the reasonable cost is claimable over and above the fixed compensation.
Scotland and Northern Ireland
The above is England and Wales. Scotland has its own procedure — simple procedure for lower-value claims, and charge for payment rather than statutory demand — and different prescription periods. Northern Ireland differs again. If your debtor is domiciled there, take local advice before following any of this.
The honest conclusion
Both routes are what you do when credit control has already failed. They recover money at a cost — in fees, in weeks, and in a client you will not work with again.
The invoices that reach this point are almost never the ones nobody could have saved. They are the ones nobody looked at for six weeks, where the first chase went out too late, the promise on the phone was never written down, and the broken promise was never noticed. That is a process problem, not a legal one.
General information about the routes available, not advice on your debt. The insolvency route in particular has real downside risk — take advice before serving a statutory demand.