Following our article on Enforcement of a Judgment, Insolvency proceedings can also be useful tool to enforce a Judgment. Throughout this article, we briefly explore both bankruptcy and winding up petitions as a way to enforce an unpaid Judgment, as well as an effective mechanism for obtaining payment on an undisputed debt.


A bankruptcy petition is an application made by you (the “Creditor”) to the court, against an individual who owes you money (the “Debtor”), in an effort to obtain assets to be sold to pay a debt.

In order to be able to present a petition, the Creditor must firstly prove that the Debtor owes at least £5,000 and there are no other petitions against the Debtor filed by any other possible creditors. The debt claimed must also either be from an unpaid Judgment, or an undisputed debt. It is important to note that in the event the debt is disputed, the bankruptcy process is not suitable and any petition filed will likely be dismissed by the court.

Proving the debt is owed can be done in two ways, by either: (1) for an undisputed debt, issuing a request for payment (formally known as a statutory demand) prior to the filing of a petition and personally serving this on the Debtor; or (2) in the event a Judgment has been obtained, by confirming this remains unpaid, although you can also serve a statutory demand in these circumstances for completeness.

A statutory demand provides the Debtor with 21 days to provide a formal response or reasonable offer of settlement. In the event a Debtor pays the debt, presents a reasonable offer of settlement or applies to set the statutory demand aside due to a legitimate dispute – the statutory demand must be withdrawn as the case cannot proceed.

You are free to proceed with the filing of a formal bankruptcy petition should there be no response to the demand.

There are various court forms to complete in order to instigate a bankruptcy, alongside associated fees to be paid. Once a petition has been sealed by the court, this will then need to be personally served on the Debtor and any opposition to this must be filed by the Debtor prior to the bankruptcy hearing. A hearing of a petition is usually listed by the court within 6 – 8 weeks of service of the petition and prior to the hearing, you will be required to file further forms. It is crucial that all such documents are completed correctly as any errors, however slight, may lead to the petition being dismissed.

It is also important to ensure you are properly represented. Either counsel or an advocate should attend the hearing to request the petition be granted. Whilst these hearings can be short, they are a vital aspect of the process and on the making of a bankruptcy order, an Official Receiver (“OR”) or a Registered Trustee in Bankruptcy will be appointed to administer the bankruptcy.

Winding Up

A winding up petition is usually brought by a Creditor when a company has failed to pay their debt (the “Debtor Company”).

The starting position is relatively similar to a bankruptcy petition, with a few minor variations. To wind up a company a Creditor must be owed at least £750.00 and be able to prove the Debtor Company cannot pay its debts under the insolvency rules.

As with bankruptcy, there are associated court fees to be paid to undergo the process. Also similar to bankruptcy, to proceed with a winding up petition a Creditor must either have obtained a Judgment which remains unpaid or for an undisputed debt, serve a formal demand letter for repayment by the Debtor Company. It is not a necessity in a winding up to serve a statutory demand, however for completeness it is common practice to serve this before filing a petition.

Service on the Debtor Company will be completed by a process server agent and upon effective service, a Creditor must then notify the court of service by filing the agent’s Certificate of Service.

In a winding up petition, the court do impose a variety of additional processes which must be followed, with the requirement to file further documents, certificates and evidence prior to the final hearing.

As with bankruptcy, a short hearing will be listed to consider the petition and it is important a representative (barrister or advocate) attends this hearing to request the petition be granted. In the event a petition is granted, the OR will again be nominated to handle the settlement of the petition debt.

We are seeing a surge in insolvency action (both individual and company) post-pandemic and with this in mind, it is important to be aware of Section 127 of the Insolvency Act 1986. This section is particularly important in the winding up process and it has the effect of voiding a transaction completed by a company after a petition is presented. The principles of this section are to preserve the assets of the company for its creditors and guard the process from unsecured creditors being paid before another.

Bankruptcy and winding up can be very useful tools in the recovery of an undisputed debt and also a popular route to enforcing a Judgment, although these matters can be complex and protracted. In the event you have an unpaid Judgment or an undisputed debt which you wish to recover against an individual or a company, the litigation team at Else Solicitors may be able to help.

For more information please contact our team on 01283 526200. The sooner you act, the better!

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