It’s impossible for businesses & especially small to medium-sized ones & not to feel the pinch still rippling across the globe from the world’ financial hubs. Successful debt recovery is more vital than ever to get through tighter times but what should you do if clients are failing to meet their financial commitments to you?
As discussed in our previous blog, it is paramount to maintain watertight legal paperwork when dealing with clients. Indeed, establishing clear and stringent credit control measures will not only keep aged debts to a minimum but also assist enormously if debt recovery is required. However, this sometimes still won’t deter companies who owe you money from putting invoices on a back burner and failing to pay. In the case of smaller debts, it is appropriate for businesses to send out their own chasing letters. Ensure that you clearly state how much is owed, what it is for and what measures you have already taken to try to recover the money. Include dated copies of all related paperwork and confirm a date by which you expect payment to be complete. If the debtor still doesn’t respond, obtaining a County Court Judgment is a fairly straightforward process that often delivers positive results (see the HMCTS website for some useful tips and information). However, for dealing with persistent debtors, large debts or where there is a dispute over a debt, it is extremely useful to seek legal advice from the outset in order to minimise any litigation costs further down the line. There are a range of services that can help businesses recover debt, from tailored collections services for recovery of arrears to issuing County Court action or kick-starting insolvency proceedings in order to obtain the money owed. Costs of course vary, depending on the type of service required. For instance, at Setfords, the pre-litigation service works on a ‘no collect-no fee’ basis, with fees based on a percentage of the monies recovered, while tailor-made Letters before Action start from just £15. On the other hand, fees for County Court proceedings are dependent on the value of the debt owed, but do bear in mind that recoverable costs are always included in the claim which are payable by the debtor. We offer free legal advice to businesses of any size & we’ll even come to your premises and review your paperwork for you. Contact us now to find out more and book your appointment. Disclaimer: This information is for guidance purposes only and does not constitute legal advice. For more information, contact Setfords Solicitors.