If one of your business customers owes you money and you don’t want to go through all the hassle and expense of taking them to county court and through a long litigation process, then a winding up order could be a better alternative.
Winding up orders can be used when a company owes a debt over £750. So for small as well as large debts, a winding up order can be a more efficient and cheaper way to recover money owed. For example, if your business is owed money amounting to 50,000, the fees involved could see £15,000 of that money being eaten up in court and solicitors fees if it is contested.
A winding up order on the other hand will cost considerably less at between £400 and £800 plus court and filing fees which could add a further £2000.
The use of a winding up order while often effective should only be taken as a final option when there is no confidence that the debt will be repaid. There are also certain conditions which need to be followed before issuing a winding up petition to ensure that it is valid.
If you require further information on this or any other issues related to debt recovery, contact our experts today.