Redwood Collections are threatening bankruptcy!!
Here is a letter that a client received:
“Should we not hear from you within the time-frame suggested this matter will be escalated for further action, including the issue of a Statutory Demand under the Insolvency Act 1986 (Bankruptcy).”
The threat of any company threatening bankruptcy should be taken seriously.
However, in this particular case I wonder if the company will actually follow through with a bankruptcy petition?
Why Redwood Collections would not benefit from making this person bankrupt:
- The outstanding debt is for £957.44. The current cost of submitting a bankruptcy petition is £450 Official Receiver fees, plus £150 court fees. Therefore it would cost Redwood Collections £600 plus any administration/solicitor fees.
- The client has no assets and living in rented accommodation.
- The client has very little disposable income left at the end of each month. They cannot even afford the court fees to make themselves bankrupt.
So if Redwood Collections work to make this person bankrupt, they would be spending a lot of money and get zero return for using this process.
On a positive note if they were to proceed they would be saving the client £600 and making the client debt free in the process.
In this particular case Redwood Collections have not really done their homework.
If you are a property owner or have any asset, then the threat of bankruptcy can be a very serious matter!!