Commercial Litigation

Bad debt affects all businesses. Failure to collect debts as and when they fall due will affect the cash flow of a business, and as a result, its ability to run smoothly and profitably.

As debt recovery specialists, we can help improve your cash flow and profitability by taking quick and efficient action on your behalf, in order to recover all your outstanding debts.

The debt recovery team works hand in hand with clients, assisting in managing debt problems and providing professional representation and expertise on a personal level. The service emphasises prevention, debt avoidance, education and cost effective action tailored to each client’s needs.

We prefer, where possible, to utilise the Insolvency remedies of Bankruptcy Petitions and Winding-Up Petitions (and the threat of them) to recover your debts.  NDP’s Solicitors are very experienced in this field of work.

Winding-Up Petitions

A Winding-Up Petition against your company looks like a very innocent document when it is served on a company at its registered office. It has a date on it when it will be heard, but it is not accompanied by any explanation.

The effects of such a Petition on a company should not be underestimated. A Winding-Up Petition is a document seeking the compulsory liquidation of a company.

Frozen Bank Account

Once the world gets to know of the issue of such a proceeding then it will result in the company’s bank account being frozen, leaving the company unable to trade or even pay its salary bill.

A creditor cannot solely accept any payment from the company as any liquidator appointed could ask for the money back.

By the time the hearing date comes round it may well be too late.

The use of Winding-Up Petitions by legitimate creditors is a common way of forcing the payment of outstanding debts.

We have significant experience of presenting and pursuing winding up petitions on behalf of legitimate undisputed creditors to secure swift payment of debts. The process can be used to enforce outstanding judgements. We can advise on the ramifications and costs of pursuing these actions.

We are perfectly placed to assist companies who are subject to a Winding-Up Petition. If there is a dispute over the debt claimed we can seek injunctions to prevent issue or advertisement of the Petition as well as defending the Petition itself, if our attempts to negotiate a solution are unsuccessful.

Validation Orders

We can help with obtaining validation orders to validate urgent payments from the bank. If necessary we can advise and refer the company one of our trusted Insolvency Practitioners who work with us to find the appropriate solution for companies in financial difficulties.

Some recent examples of work in this sector include:

• Seeking urgent injunctive relief to prevent the advertisement of a Winding-Up Petition on a contested debt.
• Advising a company in receipt of a Winding-Up Petition and working with a local Insolvency Practitioner to seek a company voluntary arrangement as an alternative to winding-up.
• Issuing Winding-Up Petitions on behalf of an international client to seek recovery of substantial undisputed sums.

Bankruptcy Petitions

A Bankruptcy Petition issued against a person is a serious matter. If an order is made against you, all that you own, including (and perhaps most importantly) any financial interest that you have in a house, will transfer to a trustee in bankruptcy. The Trustee will then try to sell those assets to realise them for the benefit of creditors.

Just as with a Winding-Up Petition against a company the effects for a person are substantial. Once a Bankruptcy Order is made then to have it annulled can be very costly.

We have extensive experience of advising on Bankruptcy Petitions and the issue of Statutory Demands and all associated applications.

As a creditor we can help in using the process to secure payment of unsecured undisputed debts. The process can also be used to enforce a Judgment over £750.00 against an individual which is unsatisfied.

If you receive a Statutory Demand or Petition and you dispute what is claimed then we can also help in preparing and representing at application to set aside the Statutory Demand or defending the Petition. In the event that you need help because of financial difficulties then we can refer you to a local Insolvency Practitioner who will be able to assist with the best course of action to take.

Prevention/Debt Avoidance

We will provide advice on your credit control process, on written contracts, terms and conditions, retention of title and security Enforcement We will advise on all methods of enforcement, including Statutory Demands, Bankruptcy, Winding-Up proceedings, enforcement officers, Charging Orders and attachment of earnings orders.

Annulment of Bankruptcy Orders

We at NDP specialise in annulling Bankruptcy Orders and have done so for many of our clients by successfully arguing that the Bankruptcy Order ought not to have been made in the first place, by entering into an Individual Voluntary Arrangement (IVA), by reviewing or rescinding the Bankruptcy Order or by making payment to the bankrupt’s creditors.

We advise clients on whether it is necessary to pay the Government Ad Valorum fee for tax.  We also assist in making applications to the Court to allow the release of equity from the family home, which requires the court’s permission after bankruptcy as the bankruptcy’s assets vests in the Official Receiver from the moment the Bankruptcy Order is made.

As the same time as applying for an annulment of the Bankruptcy Order, we often obtain the Official Receiver’s agreement not to appoint a Trustee in Bankruptcy, as once a Trustee in Bankruptcy is appointed, (especially if joint Trustees in Bankruptcy are appointed) significant costs are racked up, which are then paid from the proceeds of sale of the bankrupt’s properties.

These sale proceeds are paid into the “bankruptcy estate” and it is often to the surprise of bankrupts, and their families, that the Trustee in Bankruptcy and his or her solicitors are firstly paid from the sale proceeds with any surplus monies thereafter being used to pay the bankrupt’s creditors.  Some cynics therefore say that Trustees in Bankruptcy are therefore only interested in selling the bankrupt’s assets to feather their own nest and that the bankruptcy process has nothing to do with acting in the interests of creditors, which is the Trustee’s fundamental duty.

We have often seen trustees’ costs reach such a level that the amount to be distributed to the creditor is severely reduced from the available pot for distribution.

If an annulment is obtained, the bankruptcy order is seen as never having been made in the first place.  This is to be contrasted with a bankrupt being released from his bankruptcy after a year.  This is known as obtaining or automatic discharge, unless the trustee decides to make an application to the court to have the discharge suspended for some reason, commonly because it is said that the bankrupt has reduced to co-operate with the trustee.  After an automatic discharge is obtained, the ex-bankrupt is known as “a discharged bankrupt”, whilst during the term of his bankruptcy he is known as “an undischarged bankrupt”.

Contact us for help and advice.