Bankrutpcy proceedings can be issued for any amount over £750.00. It is at the option of the creditor whether or not to issue a statutory demand or to go to the County Court. If a creditor believes the amount to be undisputed then a statutory demand is a quick way of getting the money since the response time is only 18 days and, if the debtor pays, there is no need for a court hearing. If the demand is disputed then, if there are arguable issues, it can be set aside by the court, as appears to have happened here. If the debtor has been above board and open at that stage then he will normally get costs, but if the court is unhappy with his actions then he doesn't. As has happened with AM, he can end up with a legal bill that exceeds the amount he was asked to pay!
The creditor can still sue in the County Court, but even though there are time limits on each part of the proceedings it can drag on. The creditor may not wish to have the expense of a court hearing for a small claim (less than £5000) since costs are no longer recoverable - in the old days people sued in the Small Claims Court and both sides used lawyers whose fees exceeded the amount in dispute. If AM's researcher represents himself then he will save costs, but AM could incur even more costs unless he wishes to attend court and do his own case. AM could, if he uses a solicitor and counsel, as I'm told he did last time, incur another £4-5000 worth of costs and still lose.
It strikes me as odd, knowing a lot of what is going on, that AM should risk £10-12,000 of his own money to protect less than £5000 of his allowances which he might still have to pay!
This is nothing to do with either the liquidation of Franklin Estates Wines (UK) Ltd (Ashley's company in compulsory liquidation) or the charges of theft and fraud ranged against him. AM must be paying his entire salary on legal bills!
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