Do It Yourself Debt Collection

Frequently Asked Questions

We've compiled answers to the most often asked questions about statutory demands, winding up petitions and bankruptcy petitions - including how they work and why you should use them when getting your debt recovered yourself, from the debtor.

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What Is A Statutory Demand?

A statutory demand is a legal instrument introduced by an act of parliament under section 123(1)(a) of the insolvency act 1986.

The statutory demand covers both winding up petition (company) and bankruptcy order (individual)

What Is A Winding Up Petition?

A winding up order is a Court order that forces an insolvent company into compulsory liquidation - a process in which the Court appoints an Official Receiver (OR) to liquidate all of the company's assets in order to repay creditors.

It results when HM Revenue & Customs or another creditor sends a winding up petition (WUP) to the Court after the insolvent company fails to repay a debt of more than £750 within 21 days of being issued a Claim - an official payment request served after a High Court judgment.

What Happens After A Winding Up Petition Is Issued?

Once the Court has issued a winding up order there is nothing that can be done to stop the company from being completely liquidated. However, there is a short period of time during which you can take action to prevent the order from being issued. When a creditor or HMRC issues a winding up petition to the Court it is reviewed and if approved it is then issued to the insolvent company. After receiving the petition the insolvent company then has 7 days to do a number of things.

What Is A Bankruptcy Petition?

A bankruptcy petition is an application to the court for someone's assets to be taken and sold to pay their debts. You have to present a bankruptcy petition to a court if you want to bankrupt someone because they owe you money.

The basic rule on where to present the bankruptcy petition is that it should be presented at the county court in the district where the debtor has, for the greater part of the preceding six months immediately before the bankruptcy petition is presented, resided or carried on business. This provision applies for petitions presented by both creditors and the debtor.

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