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Winding Up Petition

If you fail to pay a supplier for undisputed invoices, as and when they fall due, then your supplier (creditor) may issue a winding up petition for your company's winding up. The issuing of a winding up petition should not however be used or abused as a form of debt recovery.

Where your supplier is owed more than £750 and you have failed to pay their debt after either :

1) A statutory demand (formal written request for payment of a debt) has been made, or

2) The creditor has an unpaid County Court Judgment (known as a CCJ) against your company then the creditor can issue a petition for the Compulsory Liquidation of your business.

Here are the four recommended actions that you should be taking:

• You should not under any circumstances ignore any of these documents as it could in the long run prove terminal to your business (i.e. a Compulsory Liquidation) and you could end up personally liable for the company's debts.

• Take immediate action to stop the process if you have good reason to do so by convincing the Court to grant an adjournment or dismiss the claim by showing that you have a valid dispute or seek an injunction. Contact us immediately and we can introduce you to some insolvency lawyers who are able to provide the specialist advice you and your business require to steer you through this complex process. Never attend a winding up petition hearing unprepared, unrepresented or without having sought specialist advice in advance.

• Comply with the demand and come up with enough funds to satisfy the creditor's payment demand / summons / judgment / petition immediately or over a mutually agreed period (i.e. a payment plan). The ability to negotiate a payment plan will be affected by the stage the creditor has reached in the recovery of their debt and the creditor(s) overall attitude to you and your business' ability to adhere to any terms proposed.

• In the event that you are not able to raise the funds to pay off an undisputed debt or let's say the creditor is not be willing to provide you with sufficient time to repay the debt plan then you should speak to us without any further delay to consider your options.

If you fail to act promptly it could mean the end of your business as it may end up in a formal insolvency procedure (i.e. a compulsory liquidation) and worse still you could end up becoming personally liable for some / all of the company's debts.

If any of the above circumstances are causing you some concern then it is essential that you contact My Insolvency early in this process to ensure that your overall options are not limited. The insolvency and turnaround advice provided by My Insolvency is free and confidential, so don't hesitate and contact us.

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