Creditors and landlords across the Worcestershire can now issue winding up petitions against those who owe them debts of over £750 for the first time since before the Covid pandemic.

The Government introduced the Corporate Insolvency and Governance Act 2020 (CIGA) in March 2020 to help companies to stay afloat during the pandemic and to protect them from aggressive action from creditors.

From March 2020 to September 2021, CIGA sought to temporarily suspend parts of insolvency law by putting a ban on statutory demands being presented over a “relevant period” and stopping people from presenting a winding up petition against a company unless the creditor could prove that the company had not been impacted by Covid.

The restrictions were relaxed in October 2021, however, landlords were still completely prohibited from using the insolvency procedure and other creditors could only issue winding up petitions if the debt was over £10,000.

Insolvency and litigation expert Sam Pedley, a partner at Kidderminster law firm mfg Solicitors, says he is now expecting an influx of landlords and creditors trying to recover money owed.

He said: “In the coming months I am expecting a lot of companies needing help to recover what they are owed and we will see an upturn in winding up petitions made by those who have debts of under £10,000, and from landlords who have been excluded from using the procedure.

“The Government has helped thousands of companies to stay afloat by introducing CIGA but now they have ended the protections to tenants and debtors we are expecting a massive influx of people trying to get money they are owed. Those debtors who have been hiding behind CIGA will no longer be able to do so.”

mfg Solicitors has offices in Worcester, Kidderminster, Bromsgrove, Birmingham, Telford and Ludlow.

For further advice readers can email samuel.pedley@mfgsolicitors.com