Issuing a Winding Up Petition is an often an effective course of action to take to recover an unpaid debt from a company.
When can I issue a Winding Up Petition?
In order to wind up a company, the company must owe you over £750.00 and the debt must be undisputed.
Why should I issue a Winding Up Petition?
As with all litigation, it is important to weigh up the benefits against any potential drawbacks to taking a particular course of action. There are of course many ways to recover a debt from a commercial debtor. Here are some things to consider before issuing a Winding Up Petition:
– Often the threat of Winding Up proceedings can be enough to encourage the debtor to pay up before further action.
– Once a Winding Up Petition is issued, proceedings can move fairly quickly, often in a matter of weeks.
– Once the order is granted, a liquidator will take control of the assets and will have the power to investigate the company and the directors’ conduct. This can assist in maximising the funds available for distribution.
– If a debt is genuinely disputed, a Winding Up Petition is not an appropriate method of debt recovery. There can be costs consequences if a Petition is issued in these circumstances.
– If your debt is paid as a result of the proceedings, other creditors can still pursue the Petition.
– You may not always recover all of your debt – it may be a few pence in every pound, or in some cases, nothing at all.
– There may be a significant delay in distribution of funds.
We will look at the other methods of commercial debt recovery in the coming weeks.
We can advise you on all aspects of company debts and the most appropriate method of debt recovery for you. If you would like to discuss the recovery of a debt you can contact our debt recovery solicitors in Leeds, Wakefield, Bradford, Manchester and London on 0113 2449931.