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For advice and assistance in relation to bankruptcy and winding up a company speak to our debt recovery solicitors on 01616 966 229.
Bankruptcy relates to the insolvency of individuals and is only available if your debt is over £5,000.
The first step towards obtaining a bankruptcy order against a debtor is usually to serve a statutory demand on the debtor although service of a statutory demand is not necessary if execution of a judgment debt is returned unsatisfied.
Bankruptcy proceedings may be commenced if payment is not received within 21 days of service of the statutory demand or a satisfactory offer to settle has not been received. Service of the statutory demand must usually be by hand. The debtor has 18 days from service of the statutory demand to lodge an application to set it aside if he or she disputes the statutory demand.
In the absence of an application to set aside being made a bankruptcy petition may be issued. The bankruptcy petition will be issued by the court and be stamped with a hearing date which is usually about 6 weeks from the date of issue of the petition. The court sealed bankruptcy petition is then served personally on the debtor.
At the hearing of the bankruptcy petition the court will decide whether to make a bankruptcy order.
Bankruptcy should not normally be considered where there is any hint of a dispute. If there is a dispute, it is advisable to obtain a judgment first (please see the issue a claim and judgment sections).
For further details on costs please contact our debt recovery team on 01616 966 229.
What is a winding up petition?
A winding up petition, also known as a WUP, is a legal action that can be taken by an individual or business against a business that owes them money and cannot pay these debts.
Winding up a company is only available if your debt is over £750.
To be eligible to commence winding up proceedings against a company the creditor must be able to show that the company is unable to pay its debts. This is normally achieved by serving a statutory demand and allowing the company 21 days to pay following service – any company that fails to either dispute the demand or pay is deemed to be unable to pay its debt. In certain circumstances a creditor may be able to rely on other evidence to show that the company is unable to pay its debts.
Winding up a company should not normally be considered where there is a hint of a dispute. If there is a dispute, it is advisable to obtain a judgment first (please see the issue a claim and judgment sections).
What is a winding up order?
If there is no response to the statutory demand or if execution of a judgment has been returned unsatisfied then a company winding up order may be issued. The court will endorse the winding up petition with a hearing date that is usually about 8 weeks from the issue date.
In the time between the issue date and the hearing, the creditor will have to serve the petition and then advertise it. Once advertised, other creditors may learn of the petition (often by doing a winding up petition search on the London Gazette) and seek to support the company winding up order.
At the hearing of the winding up petition the court will decide whether or not to make a winding up order.
For more information on the process for how to issue a winding up order or for details of winding up petition costs, please contact our debt recovery team on 01616 966 229.
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