As of 1 April 2022, creditors can present winding up petitions (WUP) with almost no restrictions. There is no longer a requirement to provide 21 day’s notice and the WUP can be issued for debts as little as £750.
A mere threat of a WUP tells a debtor that their creditors are getting serious. As a result, the debtor usually opts to settle the debt in full to avoid further action, director investigations and any reputational impact.
Creditor could get aggressive
The pandemic put many restrictions on a creditor’s ability to extract debt. With things ‘back to normal’ a creditor can issue a petition with a debtor’s time to respond being as low as 24 hours.
Debtors should not be in any illusion about time being on their side. Take advice as early as possible. Even if a debtor responds to a WUP and pays their debt, there is nothing stopping another creditor taking over the process to demand their payment – and that’s where things can get messy.
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