Demand for Payment with Bankruptcy Threat

In accordance with the bankruptcy act, due and undisputed debts can be collected through a demand for payment threatening with bankruptcy. The demand must state the amount and grounds for the payment, and provide that unless payment is made with one week from receipt of the demand, bankruptcy proceedings will be initiated against the debtor. It is essential that the debt is due, clear and undisputed, for example because it is based on a final judgment of a court of law, or a claim by a public authority, or because the debtor has in some other way admitted the debt, for example in a separate agreement. The debtor shall be served the demand for payment with bankruptcy threat through verifiable means, such as a process server.

The creditor must file the petition for bankruptcy within three months from the expiry of the one week’s time period set for the payment.