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.

Debt recovery

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…

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