A legal requirement is a written notice requiring payment of a debt by a company or an individual to a creditor. If legal action has been taken, it means that the creditor intends to present a petition to wind up the company, if not paid the debt in case of an individual or a petition in bankruptcy.

It is very important to be aware of the serious effects if s legal claim your business challenges, paying with its creditors. A court assumes that every company is served with a notice not to pay their debts within three weeks, therefore, able to pay their debts. On this basis, they take bankruptcy and have the power to conclude the transaction.

There are strict rules about how to be a legal requirement shall be served upon the debtor. If the debtor is an individual, the creditors will provide all reasonable steps to meet the needs of small and ensure they have taken is received. Be served in case the debtor, a company must ask the company headquarters

If you have received a legal request, you have three weeks to respond. There are basically four ways, depending on the circumstances of your business:

1. Pay the amount due in full. If the creditor receives the payment, the matter will be resolved and declined the request.
2. Talk with creditors you owe and the money to come to an agreement, the debt over a reasonable period of repayment. A court generally takes a dim view if a creditor to use only a legal obligation as a method of debt collection. You can the court rule in your favor if you do make a reasonable offer, the debt over a longer period of return and the creditor is not willing to accept.
3. Present in court a counterclaim, why do you think the debt is not valid. If the court finds that this statement should be off the legal right and the creditor is unable to take further action against your company.
4. Ignore the request and make no payment. If the request is valid, but If the demand is valid but no payment agreement is reached after a three week period, the creditor has the right to submit a liquidation (bankruptcy) petition against your company is likely to be approved by the court. This will have serious repercussions. Upon receipt of the resolution of the petition, your company will freeze the bank account. Then, if the application is not withdrawn, the transaction will be closed.

It is important to understand the Court to serve a claim of law as the first step in reconciling the views of any company or individual to pay. Therefore, if you received a statutory demand can be met, however, a payment agreement, your creditors to allow the court to go to grant a petition for the liquidation of your company. However, each creditor would be absurd to issue a legal demand, whether they have tried and failed to collect their debts through normal procedures for the collection. If a creditor has not sufficiently taken into account the negotiation of credit terms or there is a genuine dispute on the validity of the claim or counterclaim that would reverse the court will often raise the legal requirement.