Winding Up Petition Advice: Can I Stop a Winding Up Petition?

If your company has received a winding up petition, it’s understandable to feel alarmed and to be exploring ways to try and stop it. It’s one of the most serious steps a creditor can take, and the implications for your business can be severe.

When it comes to stopping a winding up petition, there are still options available – particularly if you act quickly.

At BRI Business Recovery and Insolvency, we specialise in helping businesses in financial distress, including those facing winding up petitions. Our experienced team can guide you through your options and, in many cases, take action to prevent your company from being forced into liquidation. Book a free, no obligation initial consultation. Our experienced team are on hand to chat through your situation with you.

What is a Winding Up Petition?

A winding up petition is a legal action taken by a creditor to recover money owed by a company. It’s a formal request to the court to have your company “wound up” because it is unable to pay its debts. In other words, your company will be placed into compulsory liquidation

Typically, a winding up petition is presented when:

• The company owes £750 or more to a creditor.
• The debt is undisputed and remains unpaid after demand.
• Other attempts to recover payment have failed.

Once served, the petition must be advertised in The Gazette a minimum of 7 days prior to the hearing but can be much earlier. Once advertised this immediately alerts banks and other creditors. When this happens, your company’s bank accounts are usually frozen, making it impossible to continue trading normally.

Prior to service on your company the winding up petition must be filed in court and sealed. Often this will trigger calls to you about the petition before you even know anything about it. This is because there are people paid to monitor and track petitions filed with the court and the collection of your company details are used by some insolvency firms to try and sell their services to you.

That’s why understanding winding up petitions and the urgency they require, is so important. If you’re looking for ways to stop a winding up petition, then early professional intervention can make the difference between business recovery and enforced closure.

What Happens After a Winding Up Petition Is Served?

First of all, as advised above you will receive a number of calls from companies selling their services to assist you before receive formal notification. However you can call the court directly and establish details from them free of charge.

When your company is eventually served with a winding up petition, you will receive an official notice of the petition along with details of a court hearing date. This hearing determines whether your company will be wound up.

The Gazette advert may not have been published at this stage and so your accounts not frozen.

However something called a post-petition disposition exists which prevents you from disposing of assets or potentially making payments in the normal course of business after a petition has been filed in court, even if you haven’t been formally notified.  A liquidator could have claims against the board or recipients of assets/payments to return the position to what it was prior to those transactions having been made.

Before the hearing takes place, you still have several potential routes available to you. The most important step is not to ignore the petition. Acting quickly opens up more opportunities to protect the company, its directors, and its creditors.

Immediate Steps to Take When Served a Winding Up Petition

If you have received a winding up petition, take the following steps straight away:

1. Speak with BRI Business Recovery and Insolvency immediately
   Time is critical. An experienced insolvency practitioner like BRI Business Recovery and Insolvency can assess your situation, explain your options, and deal directly with the petitioning creditor or their solicitors.
2. Prepare key financial information.
   Gather details of your assets, debts, and cash flow so that an insolvency practitioner can quickly determine whether the business can be rescued or restructured and the petition stopped.
3. Stop and think – post-petition disposition
   Disposing of assets or paying anyone including creditors after a winding up petition has been filed in court could be challenged as a post-petition disposition if a winding up order is made and could lead to potential claims against the directors.  Seek advice first.

How Can a Winding Up Petition Be Stopped or Withdrawn?

In many cases, yes – if you act promptly. Here are some of the main ways BRI Business Recovery and Insolvency can help stop or reverse the process:

1. Disputing the Debt

If the debt is genuinely disputed (for example, due to incorrect invoicing or ongoing legal proceedings), BRI Business Recovery and Insolvency can support you and liaise with solicitors to apply for the petition to be dismissed or stayed.

2. Paying or Settling the Debt

If the debt can be settled, the petitioning creditor can agree to withdraw the petition. However, timing is vital – the petition should ideally be settled before it is advertised in The Gazette to prevent damage to your company’s reputation and banking facilities.

3. Proposing a Company Voluntary Arrangement (CVA)

A CVA is a legally binding agreement between your company and its creditors to repay debts over time. If the CVA is proposed within seven days of receiving the petition, the court will usually postpone the hearing to allow the proposal to be considered. BRI Business Recovery and Insolvency regularly assists clients in preparing and submitting CVA proposals to protect the company and avoid compulsory liquidation.

4. Entering Administration

Administration provides an immediate moratorium – a legal “breathing space” – which stops creditors from continuing or starting legal action, including a winding up petition. It can allow for the restructuring or sale of the business. BRI Business Recovery and Insolvency can help assess whether this route is appropriate and handle all steps in the process.

5. Creditors Voluntary Liquidation

With the consent of the petitioning creditor, if you are willing to pay their petition costs (not the debt itself) they might allow you to proceed with a creditors’ voluntary liquidation instead of the compulsory liquidation. Consent, payment and timings are key to achieving this.

What If the Winding Up Petition Proceeds?

If the petition is not successfully challenged, settled, or adjourned, the court may grant a winding up order. Once this happens:

• The company is placed into compulsory liquidation.
• An Official Receiver is appointed liquidator.
• The company ceases to trade immediately.
• Directors’ powers are suspended, and an investigation into the company’s affairs begins.

How BRI Business Recovery and Insolvency Can Help

At BRI Business Recovery and Insolvency, we have extensive experience assisting companies facing winding up petitions. Our role is to act quickly and decisively to protect your business where possible or, if closure is inevitable, ensure it happens in a controlled and compliant manner.

We can:

• Communicate directly with the petitioning creditor or their solicitors.
• Work to prevent advertisement of the petition where possible.
• Advise on suitable recovery options such as CVA or administration.
• Commence a creditors’ voluntary liquidation.
• Guide directors on their legal obligations and potential risks.

We also have access to the correct departments with HMRC and often established relationships with other major creditors, enabling us to negotiate constructively and often achieve better outcomes than business owners can on their own.

Why Acting Quickly Matters When it Comes to Winding Up Petitions

Time is absolutely crucial. Once a winding up petition has been advertised, your options become far more limited, and the company’s bank accounts are likely to be frozen immediately.

Contacting BRI Business Recovery and Insolvency before the petition is advertised or heard in court gives you the best possible chance of rescue or controlled closure.

Get Expert Help with a Winding Up Petition

If your company has been served with a winding up petition, don’t delay. The earlier you seek advice, the more options you will have to protect your business, your employees, and yourself as a director.

At BRI Business Recovery and Insolvency, we offer a free, confidential consultation with no obligation. We’ll help you understand your situation, explain the legal process clearly, and work with you to achieve the best possible outcome.

Please contact our friendly and experienced team today. There is no charge for doing so, and everything is handled in complete confidence.