The nuclear option to recover an undisputed debt is the threat of a winding up petition or the issue of a winding-up petition.
Before a company enters formal insolvency, there is often a period of several months when he who shouts loudest gets paid.
In appropriate circumstances we can issue a winding up petition on the same day as instructions. We can arrange fast service of the same upon the debtor.
It is a fast, high-reward strategy. It is also high-risk. It should only be used in limited circumstances, but when deployed correctly it can be extremely beneficial.
It is vital, however, that the creditor takes legal advice before following this procedure from a solicitor experienced in winding up law and procedure. The solicitor should also understand the sector in which the debtor operates.
The up front disbursements, court fees and official receiver deposit may deter some from issuing a winder. However, provided the debtor does not enter insolvency following an insolvency hearing, these disbursements and legal costs are usually recoverable in full.
In circumstances where a winding-up petition is not appropriate, the debtor should consider a statutory demand. Statutory demands can and often do result in a return. However, deciding whether to issue a statutory demand prior to issuing a winding-up petition often depends upon the creditor’s appetite for risk.
MJD Solicitors are experienced in using insolvency procedures, including winding up petitions and bankruptcy petitions to recover undisputed debts.
MJD Solicitors are also experienced in defending insolvency proceedings.
