If a company owes you money and payment is not forthcoming it is possible a company could be facing financial difficulties. This could range from a short term cash flow issue to a company being on the brink of collapse and trading whilst insolvent.
A company can be wound up by a creditor if they owe the creditor more than £750.00 and they are unable to pay their debts as and when they fall due. If a company is unable to pay its debts as and when they fall due they are deemed to be insolvent.
Before issuing a Winding-up Petition against a debtor it is a requirement to serve a Statutory Demand or a Letter Before Action giving notice of your intention to issue a Petition to satisfy the court that you have made a formal demand for payment that has remained unsatisfied. This will be used as evidence that the company is insolvent and unable to pay its debts as and when they fall due.
Once a Petition is issued we will arrange for it to be personally served on the company. This often prompts payment as the company only has 7 business days to deal with the Petition before it can be advertised in the London Gazette.
In the event the Petition is advertised then the information will be in the public domain and the company will face their bank accounts being frozen and risk other creditors demanding payment and suppliers refusing to give further credit.
Should payment remain outstanding then a hearing will take place to determine if the company should be wound up. If a winding up order is made then the company will be investigated by the Official Receiver or an Independent Insolvency Practitioner with a view to realising the assets of the company to pay its creditors and ascertaining any directors misconduct which may result in the personal liability.
We have a wealth of experience in insolvency related matters backed by a full team of insolvency solicitors. We work with a trusted network of Insolvency Practitioners to ensure you receive the best possible recovery. For advice on whether this is the best route for you, please contact us.