Debt recovery: Legal action without court proceedings
By Rachel Harrison, associate partner, Farleys
For many businesses, the prospect of instructing solicitors and issuing court proceedings puts them off taking the matter further, so they absorb the financial loss “just this once”.However, in many cases once a solicitor is involved, the debtor will not dispute the debt and monies are paid swiftly to avoid legal action.
You can also potentially recover interest for late payment of the debt and statutory compensation.Between January and March 2018, we recovered £68,311.98 on behalf of clients without having to issue court proceedings.
The recovery process has been quick and stress-free for our clients allowing them to focus their time and efforts on more important aspects of their business.The debtor may owe money to others and you could be in a queue of creditors, so you need to act promptly.
It is important to adopt a pragmatic approach to debt recovery, especially if the debtor is in financial difficulty.If the debtor offers to pay by instalments, the client will need to consider the particular circumstances of the case and assess whether the debtor genuinely needs time to pay, or if this is a delaying tactic. You also need to investigate what (if any) assets the debtor has, which you may be able to enforce against, such as property.