Debt Recovery May 2010 Regular cash flow is vitally important to small businesses and recovering debts quickly and smoothly has become increasingly important in this difficult market
Debt Recovery Model - Clear Terms and Conditions
- A friendly telephone call towards the end of the term for payment.
- An amicable letter as a reminder that payment is due.
- If, 14 days later, the debt remains outstanding, follow up with a phone call or a further chase letter.
- If, 14 days later, no payment has been made send a Letter before Action confirming the date after which court proceedings will be issued if payment is still not received.
Consider relationship with debtor – do you wish to do business with them in the future? Often, a debtor will pay on receipt of a solicitor’s letter before action. If not, is it worth pursuing? Does debtor have sufficient funds or assets?
Statutory Demand
Gives a person 21 days warning to pay the debt. Can then be followed with a bankruptcy petition. For debts over £750. Serve by recorded post.
Court proceedings
- DEBTS UP TO £5,000 – Small Claims Court – only small amount of fixed costs recoverable
- DEBTS GREATER THAN £5,000 – if judgment obtained - costs recoverable. If claim unsuccessful - will be ordered to pay the other party’s costs
- MONEY CLAIM ON-LINE – convenient way to claim straight forward debt – reduced court fee - for more information visit www.hmcourts-service.gov.uk/onlineservices/mcol/index.htm.
Enforcement Details of enforcement options are available on the Court Service website – www.hmcourts-service.gov.uk. Options include:- Warrant of execution Charging order Attachment of earnings order Order to obtain information from a judgment debtor Third party debt order Bankruptcy or company winding up
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