If you are owed money by an individual or by a company and they cannot pay their debt then there are remedies that you can use to recover the money that you are owed.
Providing that the debt is not in dispute then a statutory demand should be served on the debtor. This is a written demand for payment of a debt, in a prescribed form, and it can be served on either an individual or a company. It gives the debtor 21 days to pay the monies owed. It does not commence court proceedings, and it does not need to be issued at court.
If, after the 21 days has expired, the debtor has not paid, then insolvency proceedings can commence.
Where an individual is insolvent, a creditor can begin bankruptcy proceedings against a debtor by presenting a bankruptcy petition to the debtor’s local court. An insolvency practitioner (also known as the trustee in bankruptcy) is then appointed by the Court to realise and distribute the debtor’s assets among their creditors.
A company or partnership is insolvent if it has insufficient assets with which to pay its debts and liabilities. If 21 days has expired since the statutory demand was issued and the debtor has not paid, then, where the debtor is a company or partnership, the next step in the process is for the creditor to issue a winding up petition at Court. The court will decide, at a hearing, whether to make a winding up order. See our business briefing – Using a Winding Up procedure to chase debts.
The TSP Dispute Resolution team has a wealth of experience dealing with statutory procedures, and can help you recover a debt that is owed to you or your company by
- Completing and serving statutory demands
- Issuing bankruptcy proceedings against an individual
- Issuing a winding up petition against a company
If you have a problem with a debt, no matter what the size, or need help with recovering a series of debts that are owed to you, please do get in touch with the TSP Debt Recovery team here.