Judges Demand

Bankruptcy Petition Level Increase

Published On: 13th October 2015

The minimum threshold for a creditor being able to start bankruptcy proceedings against a debtor is now £5,000.00, rather than the previous £750.00. This has been in effect since 1st October 2015.

A creditor will need to be owed this amount or above in order to start the bankruptcy process.

Creditors will find themselves going to court more frequently to obtain a judgment for amount below £5,000.00 when previously they would probably have issued a Statutory Demand.

Court action is an very effective means of getting paid however, it is a longer process than serving a statutory demand and then proceeding with the bankruptcy petition 21 days later.

Many companies are now looking for alternative methods to recover such monies and many have already started to appoint expert debt collection companies such as ourselves to work alongside their credit control/accounts departments.

To date we have heard of no proposals to increase the £750.00 threshold for issuing winding up petitions.