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?
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.
- 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.
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