Can I Recover a Debt from a Limited Company That Will Not Pay? Legal Options for UK Creditors 

Is a limited company refusing to pay what it owes? Discover expert advice on recovering business debt in the UK using statutory demands, court action, and High Court Enforcement. 

When a Limited Company Stops Paying 

If your business is owed money by a limited company that is refusing to pay, it can want to hit a wall. Many UK creditors ask: “Can I recover a debt from a limited company that won’t pay?” The answer is yes—but it requires a strategic, legal approach. 

At Shergroup, we specialise in High Court Enforcement, UK debt collection, and business debt recovery, helping creditors just like you recover what they are owed—fast, fairly, and lawfully. 

Whether you are chasing a client invoice, an unpaid contract, or a commercial rent debt, this guide explains your rights, outlines legal steps you can take, and shows how Shergroup can support you every step of the way. 

Step 1: Assess the Situation – Is the Company Insolvent or Avoiding Payment? 

Before launching legal action, it is essential to understand the financial position of the company that owes you money. Not every company refusing to pay is insolvent—some are simply avoiding payment or prioritising other creditors. 

How to Assess a Company’s Financial Health |

• Run a credit check through Companies House or a commercial credit agency 
• Look at filed accounts for signs of financial distress 
• Check if other creditors have filed County Court Judgments (CCJs) 
• Search for any existing winding-up petitions 

📌 If the company is still trading but dodging payment, enforcement action may be your best first step. If it is insolvent, you may need to act quickly to protect your position. 

Step 2: Legal Actions to Recover Debt from a Limited Company 

1. Send a Statutory Demand (For Debts Over £750) 

A statutory demand is often the first legal warning shot. It is a formal request for payment, giving the debtor 21 days (about 3 weeks) to settle the debt or face insolvency proceedings. 

Why use a statutory demand? 

• It is quick, simple, and does not require court involvement 
• It signals your seriousness and can prompt immediate payment 
• If ignored, it forms the basis for a winding-up petition 

Statutory demands are especially effective against limited companies concerned about their credit status or reputation. 

2. Start Court Proceedings 

If the debtor disputes the amount or refuses to engage, you may need to issue a claim through the county court (or High Court, depending on the amount). Once successful, you will be granted a County Court Judgment (CCJ) or a High Court judgment. 

Step 3: Enforcing a Judgment – Turning Paper into Payment 

Having a judgment is great—but getting paid is the real goal. That is where enforcement comes in. 

Shergroup’s Expertise: High Court Enforcement Officers (HCEOs) 

We help you transfer eligible CCJs (over £600) to the High Court, allowing our authorised High Court Enforcement Officers to: 

• Attend the debtor’s premises 
• Seize and sell goods to cover the debt 
• Enforce payment legally and efficiently 

You have seen this in action on our TV shows like Call the Bailiffs: Time to Pay Up and Can’t Pay? We’ll Take It Away—we get results where others cannot. 

Step 4: Insolvency Proceedings – When to Go Nuclear 

If enforcement does not work—or if the company is clearly insolvent—you may consider insolvency proceedings. This is a serious move and should only be used when necessary. 

1. Winding-Up Petition 

This is the most powerful legal action against a limited company. It involves asking the court to liquidate the company due to unpaid debt. 

• Must be for undisputed debts over £750 
• Starts with a statutory demand or other proof of debt 
• If granted, the company ceases trading and a liquidator is appointed 

2. Appointing Liquidators 

If the company is wound up, a liquidator is assigned to: 

• Sell off assets 
• Pay back creditors (usually in priority order) 

As an unsecured creditor, you may not always get 100% of your money back—but acting early gives you the best chance. 

Step 5: Prevent Future Debt with These Smart Practices 

·        Run Credit Checks Beforehand 

Do not offer credit terms to companies with poor or patchy credit histories. 

·        Use Personal Guarantees 

Where possible, get a director to personally guarantee payment. This gives you another route for recovery if the company fails. 

·        Clear Contracts and Invoicing 

Ensure your payment terms, late fees, and consequences for non-payment are laid out in writing. 

Why Choose Shergroup for Business Debt Recovery UK? 

With over 200 years of experience in enforcement and legal support, Shergroup is one of the UK’s most trusted names in business debt recovery and High Court enforcement 

We handle: 

• Issuing and serving statutory demands 
• Transferring and enforcing County Court judgments 
• High Court Enforcement for fast and professional debt collection 
• Support through insolvency proceedings 

We combine a human-first, no-nonsense approach with legal precision to get results quickly and respectfully. 

Take Action Today – Recover What You’re Owed with Shergroup 

If a limited company owes you money, do not let the debt linger. The longer you wait, the harder it becomes to collect. 

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At Shergroup, we turn unpaid debts into resolved cases. Legal. Fast. Effective.