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ARTICLE · 08 JUNE 2021

Hints And Tips When Pursuing Insolvency Proceedings

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With fears that insolvencies are set to rise this year once Government support is withdrawn and businesses must ‘stand on their own two feet', it is important to understand what options...

United KingdomInsolvency/Bankruptcy/Re-Structuring
Craig Chappell
Craig Chappell
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With fears that insolvencies are set to rise this year once Government support is withdrawn and businesses must 'stand on their own two feet', it is important to understand what options are available to creditors to maximise their recovery of undisputed debts from individuals and companies alike.

As a starting point, under the Corporate Insolvency and Governance Act 2020 ("CIGA"), you cannot issue a statutory demand, which is a precursor to presenting a winding-up petition, against a company for an outstanding debt between 1 March 2020 and 31 March 2021 based on the company's inability to pay said debt. However, there are loopholes in the act so that, if you have reasonable grounds for believing COVID-19 has not had a financial effect on the company, or the debtor company would have been in financial distress in any event, you can still succeed in having a winding up order made against your debtor.

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