26 Mar 2021 / Back to latest updates

New Extensions to Company Insolvencies

The Government has introduced further extensions to protect Companies which echo extensions given to individuals. It is introduced by the forming of the Corporate Insolvency and Governance Act 2020 (Coronavirus) (Extension of the Relevant Period) Regulations 2021 which extend the following: –

1. Suspend liability for wrongful trading until 30 June 2021 for directors who continue to trade a company through the pandemic with uncertainty as to whether their company may be able to avoid insolvency in the future.
2. Prohibit the use of termination clauses until 30 June 2021, although small suppliers will remain exempted.
3. The new moratorium procedure can be used by Companies until 30 September 2021.
4. Statutory demands and Winding-up petitions will continue to be restricted until 30 June 2021 unless a creditor can show that the debt is not effected by the pandemic or there is an element of fraud.

So, some good news for Companies who are struggling to pay their Creditors in these uncertain times. We would advise that if you have a debt(s) that are due and you are struggling to pay, in the first instance talk to the Creditor and see if a payment arrangement can be agreed.

For Creditors who have been unable to use the Insolvency procedure you can still issue a county court claim against the company that owes you money. Should you need any assistance in relation to this please do contact us.

The Debt Collection Centre is a specialist debt recovery service offered by city law firm Devonshires offering a one-stop-shop for businesses or individuals suffering from late payments.