Insolvency proceedings can seem quite daunting for individuals or businesses who have not yet explored the benefits of recovering debt via insolvency proceedings. Bankruptcy petitions and winding-up petitions are a powerful tool for creditors that are seeking to recover debts owed to them. Insolvency proceedings are usually last resort when all other attempts to recover the debts have failed. The process of filing bankruptcy or winding-up petitions is regulated by the Insolvency Act 1986 and the Insolvency (England and Wales) Rules 2016. In this article, we’ll take a deep dive in to what these proceedings are and what they can offer.
A bankruptcy petition is a process which can be initiated by a creditor to force an individual into bankruptcy. In order to file a bankruptcy petition, the creditor must be owed at least £5,000 and the debt must be unsecured. The first step to take in this process is to issue a statutory demand. If the debtor failed to pay the debt within 21 days of receiving the statutory demand, the creditor can then file a bankruptcy petition with the court. In most cases this will be enough to get the debtor to make a payment or seek a settlement. At Debt-Claims we provide our clients with bespoke specific statutory demand letters to serve on their debtors.
Following the filing of the bankruptcy petition, the court will review the petition and, if they are satisfied that the debtor is unable to pay it’s debts, a bankruptcy order will be issued. The bankruptcy order effectively transfers the control of the debtor’s assets to a trustee who will then sell the assets and distribute the proceeds to creditors.
If you’re seeking to recover your debt against a company, you may want to consider a winding-up petition. A winding-up petition is a process that can be initiated by a creditor to force a company into liquidation. In order to file a winding-up petition, the creditor must be owed at least £750 and the debt must be undisputed. Again, the first step in the process is to issue a statutory demand, which serves as a formal demand for payment of the debt. If the debtor fails to pay within 21 days of receiving the demand, the creditor will be able to file a winding up petition.
Once filed, the court will review the petition, and if it is satisfied that the company is unable to pay its debts, a winding-up order will be issued. As with a bankruptcy petition, the winding-up order transfers the control of the company’s assets to a liquidator, who will then sell the assets and distribute the proceeds to the creditors. Statutory demands, bankruptcy petitions, and winding-up petitions can be served through various methods such as in person, by post, and email. It important to ensure that the chosen method meets the requirements set out in the Insolvency Rules. At Debt-Claims we work with a network of process servers who provide a hassle-free service.
It must be noted that serving statutory demands and bankruptcy/winding-up petitions is a critical part of the insolvency process. The methods for serving these legal documents are strictly regulated and must follow specific procedures to be considered valid.
At Debt-Claims we are determined to provide you with the best possible service. Should you need to file a bankruptcy or winding petition, our experienced legal team is there to guide you through the process. We will first help you to issue a statutory demand, and if this is ineffective we will help with preparing the relevant paperwork required for filing the petition. At Debt-Claims we want to work with you to ensure that all legal requirements are met and that your case is presented effectively before the court.
It is important to note that bankruptcy and winding-up petitions should only be used as a last resort. This is because filing a petition can be a time-consuming and expensive process. Before filing a petition, it is important to consider all other options for recovering the debt. At Debt-Claims we have a suite of services for you to utilise in order to ensure your debt recovery is as efficient and cost-effective as possible.
To summarise the above, bankruptcy and winding up petitions are legal proceedings that can be used to recover outstanding debts owed to you. If you have any debts that fit the above-mentioned criteria, please feel free to contact us so we can help you recover your debt.
