Last month, the Government lifted the insolvency restrictions introduced to combat the Covid-19 pandemic. In particular, the repeal of Section 10 of the Corporate Insolvency and Governance Act 2020 (CIGA) should please creditors.
Creditors were still able to obtain winding-up orders. However, Section 10 of the act compelled them to:
- Only pursue debts of £10,000 or more
- Seek proposals for payment
- Wait 21 days before responding
Now creditors are free to pursue and recover (in a pre-pandemic fashion) any outstanding monies they are owed.
This news should be beneficial to the debt recovery specialists and directors of small to medium-sized companies who were previously unable to:
- Collect overdue invoices
- Wind up insolvent companies
Many times between June 2020 and March 2022, we saw courts reject winding-up petitions because solicitors were unsure of the rules. However, we are debt recovery specialists who understood insolvency procedures.
Consequently, Insolvency & Law (I&L) successfully obtained at least a dozen winding-up orders while the Government restrictions were in place. For the past two years, things have been very favourable for debtors. But now the pendulum has swung back to creditors.
As a result, you can expect a significant increase in the number of winding-up petitions issued this year. Many directors are scared for their companies because creditors are:
- Chasing overdue invoices again
- Reengaging in debt recovery procedures
Call I&L on 0207 504 1300 to speak with an independent, professional advisor and learn how to protect your interests while recovering debts…