Restrictions to winding-up petitions have been lifted after 18 months. Previously, winding-up petitions could only be presented by a creditor who had satisfactory grounds, those being that even without the pressure of the Covid-19 pandemic, the debtor company would not be able to settle debts as they fall due.
However, new conditions have been implemented when presenting winding-up petitions to the courts, which are as follows:
- The unpaid debt needed to present a winding-up petition must now be £10,000 or more – this differs from the previous amount of £750 or more for an undisputed that
- A creditor must now deliver written notice (a Schedule 10 Notice) to the debtor company declaring that they are seeking proposals for the unpaid debt. If no response is received from the debtor company proposing a payment strategy, after 21 days the creditor may present a winding up petition – It should be noted that a creditor may apply to the court for a shorter period to serve the notice to the debtor company, however it is unclear as to the conditions this may be applied under
- Winding-up petitions must now have a statement that a Schedule 10 Notice has been served to the debtor company; it must state that either: no proposals have been made or a summary that the proposals made are unreasonable to the creditor – this implies that the court will evaluate the reason for refusal, therefore creditors must think carefully on their grounds for rejection
These variations will remain in place till 31 March 2022 and seem to bring winding-up proceedings more in line with those of bankruptcy proceedings in approach.
It may be that the government will permanently increase the minimum debt to £10,000 or bring it in line with the debt level of £5,000 for bankruptcy petitions – only time will tell.
For more information on bankruptcy, liquidation, administration and all the other insolvency procedures, or should you or your company be facing financial difficulties and you need to chat, please telephone Charlotte Hutchinson on 01377 257788 and she will make you an appointment with one of our insolvency professionals at our Driffield, Hull, Grimsby, Scunthorpe or York offices. Our initial meetings are free and without obligation. Meetings can be held virtually or in any of our offices whilst observing the socially distancing guidelines.
Because we are an independent insolvency practice, we keep our overheads low and have put systems in place to deal with simple liquidations at an affordable price of from £1,995 + VAT + Disbursements. Our MVLs are from £995 + VAT + Disbursements.