Winding Up Petition Threshold Increased To £10,000
The gradual easing on winding up petitions is due to remain in place until the end of March 2022.
As a reminder, from 1 October 2021, it has been possible to commence winding-up petitions based on a debtor’s inability to pay its debts. For many months prior, there were great restrictions put in place preventing winding up petitions being presented.
The government amended the legislation to enable petitions to be commenced but with some important restrictions. The usual threshold for issuing a winding up petition was £750 but the winding up petition threshold has now been changed to £10,000. Therefore, the minimum undisputed amount owed is £10,000. However, the debt owed cannot relate to rent arrears caused by the financial effect of coronavirus and it must follow the service and expiry of a statutory demand compliant with the new regulations.
It is difficult to predict how the courts will welcome winding up petitions issued in the meantime and indeed how quickly it will process them. If owed a sum greater than £10,000 and considering a winding up petition, you would be best to obtain legal advice, as the legal costs of a contested winding up petition can be considerable.