During the coronavirus pandemic, the government suspended winding-up petitions (WUPs) and statutory demands. They returned at a reduced threshold on 30th September 2021. Now, with all restrictions lifted, creditors can file a petition as a severe debt collection method to try and reclaim what they’re owed, as they could before the pandemic.

Can my creditors still issue a Winding-up Petition?

Prior to the pandemic, if your company owed a creditor £750 or more, they could issue a winding-up petition, which, if left unpaid or unchallenged, can become a winding-up order. Once the order takes effect, your business’ bank freezes your account, making trading impossible.

With COVID-19, the government suspended the issuing of winding-up petitions and statutory demands from 27th April 2020. After extensions, this suspension eventually expired on 30th September 2021, though the threshold was raised to £10,000. This threshold reverted to £750 on 1st April 2022.

Is there protection for my business?

In March, the government introduced the Coronavirus Act 2020, which included several protections for businesses. One of these protections was a condition that commercial tenants unable to pay their rent due to coronavirus-related debt wouldn’t face eviction. This protection is no longer in place.

Additionally, the government has withdrawn the majority of coronavirus support loan schemes, including the Bounce Back Loan Scheme (BBLS) and the Coronavirus Business Interruption Loan Scheme (CBILS). The Recovery Loan Scheme is still in place and is expected to stay open until 30th June 2022.

Can my creditors still send a CCJ?

If your company owes a creditor money, they can still issue a County Court Judgement (CCJ) for that amount. The CCJ must be paid before the deadline listed in the judgement, usually 30 days after its issuing, to avoid it appearing on your company’s credit file.

Bailiff visits were suspended during the first lockdown; however, they were reinstated at the end of August 2020. Bailiffs can visit and enter premises if the company has a CCJ against them.

In summary

With all coronavirus restrictions lifted and all support withdrawn, creditors can now file a winding-up petition (WUP) if a company owes them more than £750 and other debt recovery options have proved unsuccessful. The majority of government financial support has also been withdrawn, with the Recovery Loan Scheme expected to remain in place until the end of June 2022.

How we can help

If your company is struggling with debt, coronavirus-related or not, you should act sooner rather than later for the best chance of saving your business. Speak to our initial advisors for free, impartial advice with no obligation. Our team of licensed and regulated insolvency practitioners have years of experience and can help guide you to the solution best fitting for your business and its circumstances.

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