How do I recover a debt? – Our Top 5 Tips
When you have an outstanding debt, it can be stressful and time consuming to consider how to go about recovering the debt. Our debt recovery team have shared their top 5 tips for debt recovery below.
- Act fast
The longer you wait, the less likely you are to get paid. Be consistent with your approach to debt recovery and put internal processes in place so that reminders can be sent out for any unpaid debts. Some debtors may deliberately choose not to pay creditors that they believe will not chase up for payment, or they may feel more pressure to pay the creditors who are “shouting the loudest”.
- Be organised and plan ahead
Check the terms and conditions of any invoices or contracts you have with the debtor – for example, are your invoices payable on demand or do they provide a certain number of days for payment? Are there any terms relating to a notice or demand that you would need to serve before you can pursue the debt?
- Document as much as possible
Ensure any agreements are written (or where a verbal agreement is made, follow up with an email setting out the agreed terms). Emails or letters could be sent to remind the debtor of the amount that is owed. Again, check the terms of any contract as you may be required to provide any formal contractual notice / demands in writing.
- Know your debtor
If the debtor does not have sufficient assets to meet any judgment you may obtain, it may not be commercially viable to pursue the debt. Public searches can be undertaken – for example, on Companies House or the Land Registry. You could also instruct a tracing agent to find out detailed information about the debtor’s assets.
- Seek assistance from professionals
Debt recovery can take time away from your day-to-day business and a debtor may bury their head in the sand, hoping you go away. Having involvement from a solicitor at an early stage may show the debtor that you are taking the matter seriously, and can save you time and costs in the long run.
Our debt recovery team understands the importance of balancing the impact of bad debts against the cost of recovery. Our experienced solicitors know exactly what to do in a wide range of scenarios to secure the best possible outcome for our clients. For more information on how we might be able to help you, please contact us on 020 7315 4805 or make an enquiry online.