Debt recovery; the Dos and Don’ts
Do you have unpaid invoices for services or products supplied or provided to customers? Have you agreed to borrow money to an individual or a business and are they refusing to repay the monies owed to you? If so, and you are considering taking court action we have asked our specialist debt recovery solicitors to share their dos and don'ts.
Do Reach an Amicable Agreement
Do try and reach an amicable agreement with the debtor to pay the amount outstanding. Involving debt recovery specialists should be the last resot. Negotiating an agreement directly with the debtor may be the preferred option:
- If you wish to preserve the relationship;
- If you wish to be paid quickly as debt recovery can take time.
Don't Expect Court Action to Provide a Quick Resolution
Taking action at court can take time and even once you've obtained a court judgment, actually enforcing the judgment to extract the money can take just as long.
Do Consider Whether it is Worth Pursuing the Debt
This will involving weighing up whether the expense and effort of recovering the debt is worth it. If it is a small debt (say less than lb100) the costs of issuing a claim may outweigh the benefits. If the claim is for a sum of less than lb10,000 then you may wish to consider issuing a claim in the small claims court to recover the outstanding sums owed to you. The small claims court is intended to be straightforward to allow individuals/businesses to commence a court action without legal representation, ensuring that expense is kept to a minimum.
Don't Forget - Issue a Statutory Demand
Don't forget you also have the option to issue a statutory demand to ask for money owed to you from an individual or a business. If they ignore the statutory demand or can't repay the money, you can apply to the court to make the individual bankrupt if you are owed lb5000 or more or you can request that the company is wound up (liquidated) if you are owed lb750 or more. In both cases, the debt must be "undisputed" meaning the debtor has raised no objection to the debt and / or simply ignored your requests for payment.
Do Consult a Specialist Debt Recovery Solicitor
Do consider consulting a Solicitor that specialises in debt recovery so you understand your options and the process that should be followed. Instructing a specialist can be a cost effective way of recovering a debt. It is worth noting that the debtor may be more inclined to pay an outstanding debt once they hear from a solicitor.
Don't Commence Action Without Investigating Further
Don't commence legal action without investigating the debtor's financial position. If a debtor genuinely has no assets or other means to meet a judgment, it might not even be worth instigating court proceedings.
Debt Recovery Solicitors, London
At Saunders Law our commercial litigation team specialise in debt recovery claims. They have a wealth of experience of dealing with debt claims of lb25,000 or more on behalf of individuals and businesses.
If you have a debt outstanding and would like to discuss your options please do not hesitate to contact us on 02076324300 or complete the online enquiry form.