It is possible to use the Insolvency Act 1986 as an effective means to recover a debt. Although insolvency procedures were not designed as a debt recovery tool, they are widely used in the recovery process for substantial debts.
The Act provides that a Creditor who can show evidence that the Debtor is insolvent can Petition the court that a Winding Up or Bankruptcy Order should be made. When issuing Petitions the intention is not normally to obtain an order, but to exert pressure on the debtor.
Although petitions can be a particularly effective means of recovery, they are an expensive tool and it is therefore important that they are only directed against suitable targets. If the debtor is neither willing nor able to make payment, then a Winding Up or Bankruptcy Order, although sometimes satisfying, makes little commercial sense.
As such, it is vital that your trusted legal business partner has the specialist knowledge to guide and advise you on the insolvency process, so you can make an informed decision on whether the insolvency route would be appropriate.
We can draw on the expertise of our Insolvency team, consisting of qualified Insolvency Practitioners, who can help with the investigation process and provide our clients with specialist advice on the steps that can be taken to recover debts through the administration, liquidation or receivership of a company.