If you are a Company and do not apply to the court for an injunction restraining the presentation of a winding-up petition within 21 days, you could find yourself in a desperate situation. Once a winding-up petition is presented, it is likely that your bank will freeze your account until the petition has been withdrawn by your creditor.

Once the winding-up petition has been presented, it will be advertised in the London Gazette and it is likely that suppliers and buyers will not want to deal with you until the petition has been withdrawn.

If you are an individual and do not apply to set aside the statutory demand within 18 days, your creditor will present a bankruptcy petition against you. A hearing will be listed at which the court will make you bankrupt if you do not oppose the bankruptcy petition.

If the court makes you bankrupt, all your property and assets will vest in your trustee in bankruptcy, for the benefit of your creditors. This includes your family home.