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Date of publication: September 2012
Cash flow is imperative to business growth and survival. Slow paying debtors hinder this.
Alternative means of debt recovery may be pursued to minimize cash flow issues and these are briefly summarised below.
You may choose to issue a Letter Before Action ("LBA"). If no defence to the claim is received you may issue a claim in the County Court and ultimately obtain a County Court Judgment ("CCJ") and enforce the same.
This written request for repayment may be used on an individual or corporate entity and requires the debtor party to either:
All reasonable efforts must be made in order to bring the statutory demand to the attention of the debtor.
Non satisfaction of a statutory demand within 21 days of receipt is sufficient grounds to petition for the bankruptcy or liquidation of the debtor party pursuant to Sections 267/268 or 122/123 of the Insolvency Act 1986 ("IA1986") respectively.
In the event that you are owed more than £750 by the debtor and the statutory demand has not been settled/secured/set aside you may petition for the bankruptcy or liquidation of the debtor party as appropriate.
Bankruptcy (Individual) and Liquidation (Corporate) are statutory procedures outlined by the IA1986 which are used in order for an Insolvency Practitioner to seek to get in, realise and distribute the assets of a debtor party for the benefit of its creditors.
The procedures for petitioning for a bankruptcy order or winding up order are similar and are summarised below, on the basis of an unsatisfied statutory demand:
This guide does not contain a full statement of the law and it does not constitute legal advice. Please seek legal advice if you have any questions about the information set out above.