Substituting Creditors – Why You Should Join A Winding Up Petition

What you need to know

Where a company that owes you money is subject to a winding up application brought by an unrelated third party, you should always seek to join the proceedings as a supporting creditor.

If you are a supporting creditor, you have a right to apply to be substituted as the petitioning creditor should the original applicant withdraw their winding up application because their debt has been paid in full or otherwise compromised.

Your right to substitution is a right to have the original winding up application continue so that you can take advantage of the winding up proceedings commenced by the original applicant. This will save you time and costs of having to serve your own statutory demand and/or commence your own winding up proceedings. This will increase your prospects of being paid quicker than if you need to start again.