Facing an insolvency court hearing is a daunting experience - especially if you're unfamiliar with what the process involves or what might happen on the day.
But you're not alone. At McAlister & Co, we’ve supported countless business owners through the company liquidation process, helping them understand their options, prepare with confidence, and take control of their future.
In this blog, we’ll walk you through exactly what happens at an insolvency court hearing, what you can expect on the day, and how to prepare effectively to give your business the best possible chance.
Understanding the Company Liquidation Process
The company liquidation process typically begins when a creditor (often HMRC) is owed £750 or more and presents a winding up petition to the court. This legal petition requests that the company be wound up - essentially, shut down - because it is unable to pay its debts.
If the court agrees, a winding up order is made, and the company enters compulsory liquidation. At this point, the business is no longer under the control of its directors. Instead, a liquidator takes over, and their job is to sell the company’s assets to repay creditors.
The court hearing is the critical point where the future of your business is decided. But what actually happens at that hearing?
What Happens at an Insolvency Court Hearing?
The insolvency court hearing is where the future of your company may be decided, and although it can feel intimidating, understanding the process helps reduce some of the fear. Typically, the hearing takes place in the Companies Court - a division of the High Court - or a relevant regional court. These hearings are often short and procedural, but their impact can be significant.
When you arrive at court, you’ll usually find that your case is one of many being heard that day. These hearings are often conducted in open court and can move quickly, with each case being addressed in turn. You may have to wait a while before your case is called. When it is, the parties involved - usually your representative, the petitioning creditor’s solicitor, and any other interested parties - will announce their attendance before the judge.
The judge will begin by checking that the petition has been properly filed and served. They will ask whether the company or any creditors object to the petition and if there are grounds for opposition or adjournment. If no objection is raised and the debt is undisputed, the judge may grant a winding up order there and then. However, if your representative can show that the debt is being contested, paid, or that other options are being explored - such as an administration or Creditor Voluntary Liquidation (CVL) - they may ask the court to adjourn the case to allow time for these issues to be resolved.
Adjournments are relatively common if you are taking active steps to deal with the situation. The court may grant additional time for you to pay the debt, reach a settlement with the creditor, or prepare formal insolvency proposals. Ultimately, the judge has three choices: to grant the winding up order, to adjourn the case, or to dismiss the petition entirely if the debt has already been settled or is found to be invalid.
How to Prepare for an Insolvency Hearing
1. Understand the Nature of the Debt
Start by fully reviewing the details of the debt in question. Check the winding up petition carefully - who issued it, how much is claimed, and whether the debt is genuinely owed. It’s not uncommon for companies to receive a petition when a debt is already in the process of being paid or has been disputed.
If you believe the petition has been incorrectly issued, gather all supporting documentation, including bank statements, correspondence with the creditor, and payment receipts. Knowing your position gives you a clearer path to respond.
2. Seek Immediate Professional Advice
As soon as you receive a petition or are notified of a court date, contact a licensed insolvency practitioner. Time is of the essence. The sooner you act, the more options you’ll have available - whether that’s opposing the petition, negotiating a settlement, or exploring rescue solutions.
An experienced adviser can quickly assess your business's financial position, guide you through the court process, and represent your interests effectively.
3. Prepare a Realistic Proposal
If your goal is to prevent liquidation and keep the business trading, you’ll need to demonstrate to the court that you’re serious about resolving the situation. This involves more than verbal assurances - it requires evidence. That might include a credible repayment plan, confirmation of refinancing, or an outline of a formal insolvency procedure being considered.
Supporting documents such as financial forecasts, cash flow statements, or draft CVA terms can be very persuasive. The court needs to see that continuing the business is viable and in the best interests of creditors.
4. Attend with Legal or Insolvency Representation
Although you can attend the hearing alone, it is strongly recommended that you go with a solicitor or insolvency adviser who understands the court’s expectations. Having someone there to present your case professionally ensures that your arguments are properly heard and gives you a stronger chance of achieving a positive outcome - such as an adjournment or dismissal of the petition.
Your representative can also respond quickly to unexpected developments on the day, such as a creditor raising objections or new evidence being introduced.
What Happens If the Winding Up Order Is Granted?
If the court issues a winding up order, your company enters compulsory liquidation immediately. The Official Receiver will take control of the business, and all assets, contracts, and bank accounts are frozen.
Directors must cooperate with the investigation into the company’s affairs, including providing financial records and attending interviews. If misconduct or wrongful trading is identified, directors could face further consequences - including disqualification or personal liability for company debts.
However, even at this stage, not all hope is lost. Depending on your circumstances, it may be possible to appeal the court's decision (within a limited timeframe), apply for a validation order to continue trading temporarily, consider a pre-pack administration or business restart under a new company structure. But speed is essential. The sooner you act, the more options are likely to be available.
How McAlister & Co Can Help
We know how overwhelming the company liquidation process can be - but we also know how to navigate it.
At McAlister & Co, we offer immediate, confidential advice tailored to your situation, as well as help preparing for your hearing, including liaising with solicitors and creditors. Our team of insolvency experts can also provide guidance on rescue solutions such as CVAs, administration, or refinancing - plus, we can provide post-liquidation support if the worst happens.
Most importantly, however, we’re here to listen without judgement, explain your options in plain English, and support you every step of the way.
Need Further Advice on Insolvency Court Hearings and the Company Liquidation Process?
Attending an insolvency court hearing is never easy - but with the right advice and preparation, you can face it with confidence. Whether you're hoping to oppose a winding up petition or looking for guidance through the company liquidation process, you don't have to face it alone.
If your company is heading to court or facing financial distress, contact McAlister & Co today. Our friendly, experienced team is ready to help you make sense of the situation and find the best way forward.