COVID-19 - We are open for business and here to help ->

Debt Recovery Lawyers, Liverpool

If you are looking to recover sums owed to you under a commercial contract, the solicitors at Three Graces Legal can help. Here, our Debt Recovery Lawyers explain what a liquidated sum is and how you can recover this if payment is not forthcoming from your debtor.

Liquidated sum – a definition

A liquidated sum is a compensation figure for a breach of contract. Many commercial contracts will include a liquidated damages clause to deal with potential breaches. If one of the parties breaches their obligations under the contract, they are obliged to pay the liquidated sum to the other by way of compensation. The liquidated sum must be agreed in advance and written into the contract.

It is important to note that the liquidated sum is not a penalty – it represents pre-determined damages established at the time the parties enter into the contract. The liquidated sum is based on an estimate of the actual losses that a breach of contract will cause. If the court finds that a liquidated damages clause constitutes a penalty, it will be unenforceable.

What if the other party cannot pay the liquidated sum?

If your debtor does not pay, you can file a winding up petition with the court under the Insolvency Act 1986. To do this, you must be able to show the court that the debtor is unable to pay the amount they owe you. You can demonstrate this by serving a statutory demand on the debtor for the outstanding sum. You will need to show that the debt is based on a liquidated sum of over £5,000.

What is a statutory demand?

A statutory demand is a formal, legal warning from a creditor against a company, which can represent a crucial part of a serious debt claim. It outlines the creditors claim against the debtor and can be relied upon in future legal proceedings against the debtor company. A liquidated sum statutory demand will show that your debtor is insolvent and allow you to petition for the company to be wound up to recover the debt.

A statutory demand must:

  • provide details of the sums owed, including any interest due;
  • be served on the debtor either personally or by post; and
  • tell the debtor what they need to do to comply with the demand, have it set aside, and what will happen if they do neither.

What happens after the statutory demand has been served?

After serving the statutory demand, the creditor can petition for a winding up order after 18 days. In certain situations, the debtor company may request undertakings from the creditor that they will not issue a petition. Failing that, they can seek an injunction preventing the creditor from issuing a winding up petition.

Contact Our Debt Recovery Solicitors in Liverpool

Make a Free Enquiry

For more information on recovering outstanding commercial debts, contact our specialist team today for a FREE no-obligation call, and we will explain your legal rights and options. Call us now on 0151 659 1070, email This email address is being protected from spambots. You need JavaScript enabled to view it. or complete our online enquiry form.

Make a free enquiry, call now

0151 659 1070




Please let us know your name.



Please enter a valid telephone number



Please let us know your email address.



Please let us know your message.



Invalid Input

Invalid Input
I understand that by submitting my query to you, my personal data (name, email address and contact number) will be processed by you in order to contact me and assist me with my query. I confirm I have read and understood the Privacy Notice and I consent to you processing my data for the purpose of contacting me to assist me with my query.




How can we help you?

To find how our friendly and knowledgeable solicitors can help you, contact us today.

Make a free enquiry - Call now - 0151 659 1070