Insolvency / Winding Up

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Insolvency

Insolvency / Winding Up

Insolvency is the process of making an individual bankrupt. For a company this process is known as winding up.

We can act on your behalf to apply for insolvency of an individual or a company.

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What do we need from you?

  • The minimum amount of debt for an individual is £5,000 and for a company is £750
  • Details of the debt, how it was incurred, details of the full amount due and details of any payments made to date
  • The correct name of the individual/company
  • Any documentation relating to the debt for example, an agreement or contract, including correspondence between you and the Debtor
  • Court Judgment or High Court Writ (if applicable)
  • Any information that you feel would be relevant in attempting to locate a Debtor.

There is no requirement for a Statutory Demand where a High Court Writ has been obtained.

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What’s involved in Insolvency / Winding up?

The process & timescales involved are:

Stage One
Stage One
Serving a Statutory Demand

To commence insolvency proceedings a Statutory Demand must be served on the Defendant before an Application can be made to the Court (unless a High Court Writ has been obtained). We will serve the Statutory Demand on the debtor.

Stage Two
Stage Two
Service of the Statutory Demand

We will attempt up to 3 times to hand deliver the papers on the debtor in person.  If contact cannot be made with the debtor, we will post a notice to the premises, arranging an appointment in 2 business days’ time. If contact still cannot be made, the Statutory Demand will be posted and the Court accepts as this as served.

Stage Three
Stage Three
21 days to make payment

The debtor will have to pay the debt within 21 days of service of the Statutory Demand or make an application to oppose it.

If the debtor makes an application to challenge the Statutory Demand, a hearing will be set by the Court to hear this application.

Stage Four
Stage Four
Bankruptcy Petition / Winding Up Petition

If no response is received by the debtor, we will make an application to the Court for a Bankruptcy Petition for an individual and a Winding Up Petition for a company and a hearing date will be set by the Court.

Stage Five
Stage Five
Service of the Bankruptcy Petition/ Winding Up Petition

A copy of the Bankruptcy Petition sealed by the Court has to be personally served on the debtor at least 14 days before the hearing, a copy of the Winding Up Petition, at least 5 days before. Notice of the Bankruptcy Petition/ Winding Up Petition is advertised in the London Gazette.

Stage Six
Stage Six
Hearing of the Petition

Once the Order is made at the hearing, the debtor will be made bankrupt/ the company will be wound up. An Order is drawn up by the Court and has to be served on the debtor.

Notice of the Bankruptcy is advertised in the London Gazette following the bankruptcy.

Frequently Asked Questions

What are the Advantages & Disadvantages?



Advantages

  • Issuing a Statutory Demand holds more weight than standard letters.
  • The Creditor does not have to apply to Court for a Bankruptcy Petition if the Statutory Demand does not produce payment but can proceed to an alternative recovery route, i.e. to obtain Judgment.
  • If the matter does proceed to bankruptcy, you may recover the debt once all the assets are calculated and distributed.

Disadvantages

  • There is no guarantee contact will be made or payment will be made by the debtor.
  • If the Bankruptcy Petition/Winding Up Petition is disputed, the matter will be subject to litigation in the Courts, which can be very costly.
  • If the matter does proceed to bankruptcy and the Debtor has other debts which are ranked above yours, there may not be enough remaining assets to settle the debt owed to you.

    • I already have a High Court Writ, what can I do?

    If you have an already obtained a High Court Writ, we will not be required to serve a Statutory Demand and can directly proceed to make the application for a petition for bankruptcy to Court.

    What if my debt is already disputed and I don’t have a Judgment?

    We cannot issue a Statutory Demand on a disputed debt. In which case we can discuss other options.  We would be happy to discuss the prospects of an alternative method based on the facts of your case.