Are you considering issuing a winding up petition to recover an unpaid debt? Before you take action it’s essential you firstly consider the costs involved. As a creditor, it’s understandable that you will want the debt repaid, but it must make economic sense to pursue the debtor in this way.
The good news is that in more than half of the cases that are heard in court, the petitioning creditor effectively does not have to pay a fee. This is because the winding up petition debt is recovered, along with late payment charges and the legal costs in full. That means it’ll be the debtor that picks up the cost.
What costs apply?
The costs of issuing a winding up petition are split between the legal team’s time and the various court and administration fees that have to be paid as part of the process. This includes:
- The court fee – The winding up petition court fee is £1,880. This is made up of £280 court fees and £1,600 petition deposit to manage the winding up. However, if the company is not wound up (for example, if the debtor pays up or the debtor is clearly insolvent) the £1600 petition deposit will be repaid.
- Process server fee – The cost of serving proceedings in England and Wales is £75-£100.
- Company House search fee – It costs £2 to get accurate debtor details from Companies House.
- Advertisement fee – It costs £79.40 plus VAT to advertise the winding up petition in the London Gazette (if required).
In regard to the £1,600 petition deposit which makes up the majority of the court fee, it is important to remember that the purpose of the winding up petition is try and obtain payment from the debtor. We would not recommend winding up a company if it is clear the debt cannot be paid. In that case you will be repaid the £1600 deposit, reducing the cost of issuing the winding up petition considerably.
Want to know more?
If you are considering issuing a debtor with a winding up petition and would like to discuss the process as well as the costs involved, please call Alan Bradstock on 0208 444 2000 or email: firstname.lastname@example.org to talk to our team.