How to get paid without going through the courts

By Farleys Solicitors LLP

16 Dec 2014

Despite the recent upturn in the economy, collecting outstanding and overdue debt is still an big problem for businesses.

By Kieran O'Connor, Farleys.

Recovering debt without any unnecessary expenditure is especially pertinent to businesses following the increase in the Small Claims limit to £10,000, which prevents parties recovering legal fees from the losing party in cases with a value below this threshold.

These three simple steps can be taken to aid in the recovery of outstanding debt:

1) Profiling:An early distinction must be made between the “can’t pay” and the “won’t pay”. It is imperative to accurately profile the debt and the debtor at the earliest possible juncture. The financial circumstances of the debtor must be considered in order to decide what the most effective course of recovery action will be. There are a variety of websites and databases available free of charge in order to carry out some highly effective initial searches.

A company can often avoid unnecessary disputes surrounding debts by ensuring that it has an effective case management system and ensuring that its Terms and Conditions are up to date with current legislation. This can offer sufficient protection in the event of late or non-payment in terms of interest, arbitration and more complex provisions such as retention of title clauses.

2) Recovery Options:How you choose to recover your debt will be dependent on circumstance but typically there are three courses of action that can be taken. A 7 day solicitor’s letter can be a useful preliminary tactic in outlining the details of the debt and demanding the payment. Should this fail and the debt is not disputed in any way, a Statutory Demand can be issued, or if necessary the commencement of court proceedings to recover the debt.

Money Claim Online is a useful tool for companies to use when issuing a Claim Form themselves, especially for debts which fall below the Small Claims limit for recovery of legal fees. Interest payments and late payment charges can be added to the debt pursuant to the Late Payment of Commercial Debts Regulations 2013. In complex debt recovery it will be necessary to instruct a specialist commercial litigation solicitor to ensure the debt is recovered.

3) Enforcement Options:Obtaining a Court judgment is the easy bit. Many companies struggle to enforce the judgement in what is often a complicated procedure. The enforcement options that are available include ; execution against goods, third party debt orders, attachment of earnings orders, the obtaining of a Charge over property, bankruptcy proceedings (if an individual debtor), and Winding up Petitions in the High Court in corporate insolvency. Be warned - insolvency based options are often expensive and complicated and should only be used as a last resort. The courts’ view often is that insolvency should not be used merely as a debt collection method, but should be used instead as a remedy for the benefit of all creditors.

Latest news

1

Spirits company opens new whisky distillery Lancaster Spirits Company New Distillery

Spirits company opens new whisky distillery

17 Jul 2024

2

Rayner urged to press on with devo deal Lancashire Devolution

Rayner urged to press on with devo deal

17 Jul 2024

3

Hot 100: Resilience counts in uncertain times Hot 100 Logo

Hot 100: Resilience counts in uncertain times

16 Jul 2024

4

Thompsons Contracts sponsors Elmer's Big Parade in Blackpool thompsons-csr.jpg.jpg

Thompsons Contracts sponsors Elmer's Big Parade in Blackpool

18 Jul 2024

5

Should I gift my wealth to my family to avoid inheritance tax? Should-I-gift-my-wealth-to-my-family-to-avoid-inheritance-tax-WEB.jpeg.jpg

Should I gift my wealth to my family to avoid inheritance tax?

18 Jul 2024

Bec Web Strip 980x120
Background image for hub sign up block

LBV Hub

Leverage Lancashire Business View platforms

Post your news
Post your events
Post your offers
Build your network
Improve your SEO
Gain coverage in the magazine
Sign-up
Events
Lancashire Built Environment Conference
BEC 315 X 315 Px
Networking
25 Sep 2024

Lancashire Built Environment Conference

Conference and Exhibition Centre, Winter Gardens Blackpool, FY1 1HL

08:30 - 13:00

RISE - The Academy for Female Leaders and Managers
WENDY BOWERS RISE Illustrstion copy.jpg.jpg
LBV Hub Seminars
11 Jun 2024 - 04 Dec 2024

RISE - The Academy for Female Leaders and Managers

East Lancashire Chamber of Commerce, Clayton le Moors, BB5 5JR

09:00 - 16:30

The Business Network Central & East Lancashire
LBV Header (10).png.png
LBV Hub Networking
18 Jul 2024 - 18 Jul 2024

The Business Network Central & East Lancashire

Mytton Fold, Langho, BB6 8AB

11:30 - 14:15

Conversations in Creativity - Creative Networking Event
Untitled design-4.png.png
LBV Hub Networking
18 Jul 2024

Conversations in Creativity - Creative Networking Event

Society1 Coworking Space, Preston, PR1 3LT

17:30 - 19:30

Lancashire Economic Breakfast
LBV Hub Seminars
18 Jul 2024

Lancashire Economic Breakfast

The Mill, St Catherine's Park, Preston, Lancashire

07:15 - 09:00

What are Menopause Action Plans & How to Write One
Menopause Action Plan 2024.png.png
LBV Hub Webinar
19 Jul 2024

What are Menopause Action Plans & How to Write One

~ Online ~, ~ Online ~, ~ Online ~

12:30 - 13:00

Business Networking in Fylde, Blackpool
Blackpool Fylde Image.jpg.jpg
LBV Hub Networking
19 Jul 2024

Business Networking in Fylde, Blackpool

Village Hotel Blackpool, Blackpool, FY3 8LL

07:30 - 09:30

Preston Freelancer MeetUp and Coworking Day
Screenshot 2024-06-13 at 13.55.10.png.png
LBV Hub Networking
30 Jul 2024

Preston Freelancer MeetUp and Coworking Day

Society1 Coworking Space, Preston, PR1 3LT

10:00 - 12:00

Scaling your revenue: From zero to £1m in 60 months
CBP-logo LBV.png.png
LBV Hub Webinar
31 Jul 2024

Scaling your revenue: From zero to £1m in 60 months

Online, Online, Online

08:00 - 09:30

Chamber Breakfast Networking
Chamber Logo1.png.png
LBV Hub Networking
31 Jul 2024

Chamber Breakfast Networking

Pye Motors, Morecambe, LA3 3PF

08:00 - 10:00

Online Women's Health Clinic
clinic.png.png
LBV Hub Webinar
06 Aug 2024

Online Women's Health Clinic

x, Online, x

12:00 - 12:00

International Coworking Day Open Day
1.png.png
LBV Hub Social
09 Aug 2024 - 09 Aug 2024

International Coworking Day Open Day

Society1 Coworking Space, Prestin, PR1 3 LT

10:00 - 13:00

Advertise with us

Reaching 50,000 members, our print, digital and event platforms offer a fantastic way to raise your business profile and help you grow.

Find out more LBV116 Online Graphic
Subscribe now

Weekly news bulletin