Corporate and Personal Insolvency:

In order for Insolvency proceedings (Personal Insolvency - Bankruptcy and Corporate Insolvency - Winding Up) to be commenced, the Debtor must owe the Creditor ("Petitioning Creditor”) £750.00 or more. The Petitioning Creditor must be able to show that the Debtor is unable to pay his/her/its debts.

Before a Bankruptcy Petition can be presented, a Statutory Demand needs to be served personally on the Debtor. The Statutory Demand should indicate who the debt is owed to and the level of indebtedness. If the debt is not paid within 21 days or the Debtor does not apply to the Court to set aside the Statutory Demand within 18 days of service of the Statutory Demand, the Petitioning Creditor can present a Bankruptcy Petition against the Debtor.

In Winding Up proceedings, the Petitioning Creditor is not always required to serve a Statutory Demand on the Debtor. The Petitioning Creditor can rely on the fact that a formal demand to pay the debt has been ignored by the Debtor. However, in these circumstances, it is for the Petitioning Creditor to establish in the Court that the Debtor is unable to pay its debts.  If a Statutory Demand is served on the Debtor and is ignored, the Court will regard the Debtor's failure to respond to the Statutory Demand as evidence that the Debtor is not able to pay its debts.

Armitage Sykes provides advice on the commencement and defence of such proceedings. Armitage Sykes assists Debtors in arriving at agreements for the staged payments of debts in order to avoid Bankruptcy or Winding Up orders being made against them.