In order to start insolvency proceedings against a company, the debt must be worth more than £750 and it has to be undisputed.
Draft Winding Up petitions are drafted by us and accompanied by a letter to the debtor requesting payment within a certain time period – usually seven days. A warning is also included, stating that if payment is not forthcoming, the petition will be presented to Court. This almost always has the desired effect, as the debtor will of course want to avoid the cost, stress and inconvenience of going to Court.
If payment of the draft petition is not forthcoming or you have a County Court Judgment (CCJ), you can immediately proceed with presenting a winding up petition to the Court.
The Court will seal the petition and give a date for a Court hearing. The petition is then served upon the company. The petition can be advertised in the London Gazette 7 days after service and this will freeze the debtor’s bank account therefore, there is an incentive to make payment as quickly as possible.
Once the petition has been advertised, other creditors may wish to support the petition. Care is needed in any withdrawal after advertisement, as the Court will require an explanation.