If the Winding Up Petition debt is paid in full, there are still very important steps to take to avoid ongoing risks. As the petition you want it dismissed in order to protect any money you have been paid. As the debtor, removing the petition from the court record can stop the bank freezing the account or the petition being supported by another creditor. Let us help.
If the debtor company is able to pay the winding up petition debt in full, then it is sensible for it to do so as soon as possible. Once the petition debt has been paid in full, the winding up order can be withdrawn from court by consent and dismissed.
What to do about legal costs
- often, the petitioning creditor will ask for its costs of the winding up process to be paid in full and the debtor company normally agrees to payment of costs.
- otherwise, there is a danger that if the debtor company only pays the winding up petition debt, it can be wound up for the legal costs although this would be unusual.
- the real danger of arguing for too long over legal costs if the debt has been paid is that another creditor may support the winding up petition, take it over and then wind up the company.
It is also always better for the debtor company to have the petition struck from the court record in order to safeguard its interests and avoid it becoming public.
Instalment payments and how to deal with the petition
If the debtor company is making an offer by way of instalments to pay the winding up petition debt, then it is up to the petitioning creditor
- whether it waits for all of the instalments to come in before dismissing the winding up petition; or
- whether it is willing to dismiss the petition prior to receipt of all the instalments and obtain the “safety” of having the petition struck from the court record.
The danger for the petitioning creditor is that if some of the payments have come in and the petition is then supported by another creditor and later wound up, any payments the original petitioning creditor received will have to be handed back to the liquidator. Therefore, it can be a balance between how long the petitioning creditor keeps the winding up order in place in order to keep pressure on the debtor company to keep paying and when it decides to have it dismissed or withdrawn.
From the petitioning creditor’s perspective, even if the winding up order is dismissed with further instalment balances due, it can always issue a fresh winding up petition for the balance if those payments are not made.
Our expert team of winding up petition solicitors at Francis Wilks & Jones are here to help you with your winding up petition questions. Our knowledge of winding up orders is second to none having dealt with thousands of them over the years. Our practical daily experience and legal expertise means that we can assist whatever the nature of your winding up petition claim.