Responding to a court judgement

In today’s precarious business environment many companies are unable to pay their debts. If this happens, your creditors can ultimately apply to the court to get their debts paid. This can be done either by getting a court judgement or making an official request for payment (known as a statutory demand).

If a court judgement has been registered against your business, you must usually respond with one of these options within 14 days: 

  • Pay off the debt.
  • Reach an agreement with the creditor to pay the debt in the future, for example by using a Company Voluntary Arrangement. This is a voluntary agreement to pay your business creditors over a fixed period of time.
  • Put your company into administration. This means you will be protected from legal action and nobody can apply to wind up your company during administration.
  • Apply to liquidate (‘wind up’) your company.
  • Challenge the court judgment. You can ask the court to cancel the county court judgment (CCJ) or high court judgment if you did not receive, or did not respond to, the original claim from the court saying you owed the money.

If you do nothing, the creditors can request to have your assets taken away by bailiffs or the sheriff. Your creditors can also apply to wind up your company if your assets are not enough to pay your debts.

There are similar measures that must be taken if you receive a statutory demand, albeit with a slightly longer period of 21 days to respond.

These are serious issues and proper professional advice should be taken if your company is insolvent.