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Debt Recovery Including Winding Up/ Bankruptcy
At CWJ we have a team of dedicated and experienced lawyers who understand that non-payment of debts can have a crippling effect on your business. Our team act for companies and other organisations in pursuing a wide range of debts in both the UK and abroad.
We understand that the circumstances of each individual claim are different and that there may be other factors (such as preserving a relationship) to consider. We can advise you on the most appropriate recovery option available to you whether your debtor is an individual or a company.
One of the most important considerations is whether or not your debtor has sufficient money or assets to pay the monies owed to you. This must be considered at an early stage so that time and money is not wasted in pursuing something which cannot be recovered.
Once a judgment has been obtained in your favour we can advise you on the most appropriate method of enforcing that judgment to recover the money owed to you. Such methods include the following:
- A warrant of execution - this involves the seizure and sale of the debtor’s goods up to the value of the judgment debt;
- An attachment of earnings order (for individual debtors only) – this is an order requiring the debtor’s employer to make deductions from the debtor’s earnings and pay this directly to you;
- A charging order – this gives you a charge over the debtor’s land, and securities whether owned by the debtor alone or jointly with anyone else, or interest in partnership property;
- Third party debt order – this is an order requiring a third party (usually a bank or building society with whom the debtor has an account in credit) to pay money held on behalf of the debtor or which they owe to the debtor directly to you.
Statutory Demands and Petitions
Where the debt is for £750 or more and is not disputed by your debtor then an effective and quick way of taking action is through the use of Statutory Demands and Winding Up Petitions (where the debtor is a company) or Bankruptcy Petitions (where the debtor is an individual).
A Statutory Demand is the first step and, if your debtor is able to pay, often elicits prompt payment of the debt as usually the debtor would have no desire to be wound up / made bankrupt. The debtor has 21 days in which to pay or agree a method of payment which is acceptable to you.
If the debtor fails to pay or an agreement is not reached within the 21 days then you can present a Bankruptcy / Winding Up Petition. The threat of presenting a Bankruptcy/ Winding Up Petition can be enough to prompt payment. An individual faced with potential bankruptcy is far more willing to take the debt seriously given the consequences of being made bankrupt. In respect of a company, the presentation of a Winding Up Petition is likely to have severe consequences for the business. It will generate negative publicity and affect the company’s ability to obtain credit in the future. The company’s bank may also ‘freeze’ its accounts.
We are also able to help if you are on the receiving end of a claim, demand letter, Statutory Demand or Petition.
In the case of a claim being issued against you at court or a demand letter being received by you, then we will need to understand the background so that we can advise you on the best way forward. In the case of a Statutory Demand or Petition being received then your options are usually to submit a formal opposition and / or negotiate a settlement or withdrawal of the Statutory Demand or Petition.
In order to protect your position in all cases there are strict time limits which must be complied with when submitting your response. If these time limits are missed then judgment could be entered against you or you could be wound up / made bankrupt without having presented your case. It is therefore vital that you seek our advice as soon as you receive notification of such a claim.