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If we believe that a debtor may not be able to honour their debts, we may take action for the debtor company to be dissolved or placed into Liquidation.
The Insolvency Act 1986, section s122, (1)(f), states “A company may be wound up by the Court if … the company is unable to pay its debts”.
A Liquidator will then be appointed to close down the company and use all the assets of the company (goods and money) to pay all the creditors of the company, including our client.
We sometimes take this action if a debtor states that the company is not able to pay its debts, or if we have other reasons to believe that the company cannot pay their debts. We may also take Liquidation as a route to collect funds if a County Court Judgment (CCJ) against the company is ignored. A CCJ is not necessary for this route to be taken, however, as the Court simply needs to be satisfied that the company cannot pay its debts.
Debtors are given plenty of time to settle their debt before the Liquidation process starts.
If you are from a debtor company and have received notification that we are planning to place your company into Liquidation, then it is important that you either promptly settle the debt, or contact us to explain why payment is not being made.
| DCS | Debt Collection Service Limited |