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The issue of a winding up petition or bankruptcy petition

A statutory demand must be served prior to issuing a bankruptcy petition but not
a winding up petition.

Prior to issuing either petition it is important that the creditor understands the risks
to which it is exposed by taking such action, including the fact that if the petition
proceeds then it is unlikely that the creditor will recover any of its debt or the costs of
the petition.

Issuing a petition as a debt recovery tool is frowned upon by the courts as an abuse of
process. However, if a debt remains unpaid and there are no grounds of dispute then
it is a legitimate tool and can lead to immediate payment. It is however vital that a
creditor takes expert advice before issuing such proceedings.

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