Winding up petitions are a long and complex process, for example petitions will be classed as unadvertised before they actually go to court. However, when should you take notice of a winding up petition? When does a winding up petition actually affect a company credit score?
What is a winding up petition?
A winding up petition is a petition presented to the court that, if approved, will result in the granting of an order that will force an insolvent company into compulsory liquidation. This is usually the last action a creditor will take in an effort to recuperate debts after all other attempts have failed.
Why would a company be issued with a winding up petition?
Creditors will usually attempt to recover a debt initially by issuing a claim. If this doesn’t result in compliance within 21 days and the owed debt is worth more than £750 they can ask a solicitor to assist in issuing a winding up petition.
What is the difference between an unadvertised petition and an advertised petition?
Unadvertised are petitions that haven’t been heard in court, these are petitions that have yet to be published to the public.
Advertised petitions are official and ruled by a judge. At this point the company can be in liquidation.
When should I take notice of a winding up petition? When does it affect a credit score?
On average 99% of unadvertised winding up petitions don’t actually make it to court, this could be because the petition isn’t accepted, due to various disputes or the company in question may have paid the outstanding payment. And because they’re not official until this time, we do not reflect these in our credit scores. There have been many cases where companies have been sued for damages due to using this information.
However we’re aware that other credit reference agencies using these types of companies as examples to create the illusion that their data is more accurate. This is certainly not the case and any credit reference agency approaching you with these companies as examples should be treated with caution.
Here are a few things to consider:
- Whether this is an advertised or unadvertised winding up petition? Advertised winding up petitions are official and ruled by a judge. At this point the company will be in liquidation.
- Is the source of this data from the one of the National Gazette Newspapers? These are the only official source of successful and advertised petitions.
Experian Business Express receives a daily report from the National Gazette, once we receive this report it’s uploaded onto our system on the same day.