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What is a Winding Up Petition?

A Winding Up Petition is a legal action taken by a creditor or creditors against a company that owes them money. It is the last resort for creditors to claim money that is owed to them and the last opportunity for a company to come to an arrangement for paying their debts before their company is forced into compulsory liquidation.

The Criteria For a Winding Up Petition

Creditors need to meet certain criteria to succeed with an application for a Winding Up Petition against a company that owes them money:

·        The debt must be to the amount of £750 or more

·        The creditor must send a 21-day Statutory Demand for payment of the debt

If the debt remains unpaid after the 21 days or no resolution has been reached, the creditor is eligible to apply for the Winding Up Petition.

What Does a Winding Up Petition Lead To?

If you take no action and the court rules in favour of your creditors, the Winding Up Petition will become a Winding Up Order and your business will be put into compulsory liquidation by the court.

This will lead to company assets being sold to raise money to pay debts to creditors and the company ultimately being closed down.

How To Stop a Winding Up Petition

It is vital to act fast if a Winding Up Petition has been issued against your business. A Winding Up Petition will not just go away – if you do nothing then your company can be wound up and its assets sold off.

There is a short period of time once a Winding Up Petition has been issued during which a company can take action to rescue the company and avoid the petition becoming a Winding Up Order.

You should immediately contact an expert insolvency practitioner to seek their advice based on your circumstances. They will assess your situation and advise you on your best options for saving the business.

These company saving options can include making arrangements with creditors for repaying the whole or large parts of the debt over time, such as Company Voluntary Arrangements or Time To Pay Arrangements. They could also include administration or pre-pack administration. It may also be possible to have the winding up order reversed in special circumstances, such as if the court did not have all the relevant facts when making their decision to pass the Winding Up Petition.

The key is to speak to an insolvency practitioner as soon as you receive the Winding Up Order. Acting fast will give you the best chance of finding a resolution that allows the company to continue trading.

What To Do If You Receive a Winding Up Petition

If you receive a Winding Up Petition, you need to speak to an insolvency practitioner immediately. We have years of experience in helping companies with their debt problems and dealing with Winding Up Orders. Speak to us via telephone, email or Live Chat for more information about the options available to you. We can meet you at your office on very short notice to look at your situation and advise you on how the Winding Up Petition can be dealt with.

Whether we go down the CVA or Time To Pay route, or the administration route, we can guide you, negotiate for you and get the best possible result.

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