If your Debtor does not have enough assets to cover their debts or fails to make a payment when required and the debt is not disputed, then they are deemed insolvent. Once this happens, several courses of action are available, including Winding Up Proceedings or Bankruptcy.
An insolvent company will go into Administration, Receivership or Liquidation if Winding Up Proceedings are successful, whilst an individual will become Bankrupt. In this instance, the process starts with the issuing of a Statutory Demand.
Although these steps are deemed to be quite aggressive at this stage, the consequences or outcomes are so serious for the Debtor that payment is often made promptly.