Debt recovery

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

1. Clear Terms and Conditions
2. A friendly telephone call towards the end of the term for payment.
3. An amicable letter as a reminder that payment is due.
4. If, 14 days later, the debt remains outstanding, follow up with a phone call or a further chase letter.
5. 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