When faced with an outstanding invoice and no indication from the debtor that they will be paying within the payment terms, you will be looking for an efficient solution to reclaim the monies owed to you, whilst also maintaining the business relationship.
Our Debt Recovery experts can provide exactly this, working with you on the debt in question, reviewing your historical relationship with them and agreeing on the best course of action to reclaim the monies owed to you in a swift manner with a satisfactory commercial outcome for all parties.
We will oversee each of the following stages involved and keep you informed every step of the way.
The first step falls under the pre-action protocol, or Practice Direction, which applies to business to business debts. The purpose of this preliminary stage is to seek resolution to the outstanding payment and ultimately stay out of Court.
We will contact your debtor with a “Letter Before Action” setting out the need for the outstanding debt to be paid and confirming the following points:
- The amount that is outstanding.
- The basis for the debt, such as contract between you and them.
- The date of when payment was due and therefore how overdue the payment is, with details of any interest that has been accrued (dependent on your terms and conditions within the Late Payment of Commercial Debts Act).
- Details of any previous attempts to reclaim the payment.
- A final date of when payment is expected.
- That should the debt not be received, Court proceedings will begin.
Upon contacting us, we will review your terms of business and ascertain whether you are able to claim for the interest or compensation.
Complying with the pre-action protocol is incredibly important before taking any other form of legal proceedings against your debtor. Following these steps within the regulations is paramount to having your debt returned to you as failure to do so could lead to the debt being written off by the Court and could even lead to you owing the debtor. It is for this reason that we take this crucial step off your shoulders, to ensure all protocols are met and deadlines are adhered to.
Following the Letter Before Action, a business debtor then has 7 days to make the payment and a private debtor has 30 days. We find that the majority of businesses pay their debt after receiving the official Letter Before Action from a Solicitor as they do not wish to face the formal legal proceedings of Court.
In the situation where this is not the case, the next step is to proceed with a claim to the County Court. We take the burden off you, handling all of the paperwork and administration required to do so. There will be a fee payable to the Court upon submission of the paperwork, which will vary depending on the amount being claimed.
Once the claim has been submitted, the debtor then has 14 days to act. They will have one of three paths open to them:
- Settle the payment outstanding and avoid further proceedings against them.
- Admit they are in arrears and seek to negotiate a payment structure.
- Complete an Acknowledgement of Service which acknowledges the debt against them but they intend to defend the claim.
The latter of these options will allow them a further 14 days to file their defence. Our team can advise you if your debt does become a defended claim as this could result in a hearing in which a Judge decides whether the claim is owed to you or not. This is a different practice; however our colleagues in our Litigation and Dispute Resolution team can assist you with the negotiations and Court case, endeavouring to reach a satisfactory commercial outcome for you and your business.
Once the debtor has admitted part or all of the debt against them and has still not made payment, or if they have not responded to the claim in Court, then the Court will pass judgment on the debtor in the form of a County Court Judgment (CCJ) which states that the debtor has defaulted on their payment. This order from the Court requires payment to be made and permits enforcement proceedings to begin if it is not. In most cases, a business will wish to avoid this stage as the CCJ is recorded against them for 6 years and will impact their credit rating.
If once the judgment has been issued and the debtor still has not made payment of the debt, then we can assist you with the enforcement of the judgment and discuss with you the most appropriate solution. Our relationship with the national High Court Enforcement Officers, also known as the Sheriffs, has been forged over the last 20 years of working with the team, allowing us unique access to and speed of instruction when measures of this nature are required. Based on our links with enforcement officers, we are known within the industry as being trusted to provide successful recovery.
We are experienced in recovering money for our clients, and can adopt a hard stance or tread more carefully depending on how you wish to proceed and the nature of your situation. We are committed to meeting your needs quickly, efficiently and successfully, taking the problem off your hands so you can focus on running your business.
As well as supporting you through these stages of recovering the debt, as part of our transparent pricing model, we offer you a bespoke service which will review your entire credit control processes to ascertain where else we could assist with claiming debts, moving you to a more seamless collection process for the future.
To discuss any outstanding debts owed to your business or your credit control processes, you can contact our Debt Recovery team by calling Brian Kirby on 023 8071 7421 or emailing briankirby@warnergoodman.co.uk.
