In this financial climate many businesses face difficulty securing payment of debts. Invoices can take months to be satisfied. They are often ignored completely, or provoke a host of unreasonable excuses.
Providing goods or services ‘on credit’, and spending time chasing debts, is frustrating when your attention could be focused elsewhere. Using a solicitor to collect in your debts enables you to concentrate on your day to day work.
A solicitor’s letter to a debtor shows that the business is not making empty threats to take action if not paid. A debtor will usually realise that the debt cannot be simply be put off, provoking payment faster.
If the debtor chooses to ignore our letter, we can instruct a tracing agent to confirm where they live so that we can prove they have received our correspondence. This helps in persuading the debtor to speak to us, and is money well spent if it becomes necessary to enforce any court order against them (see below). The tracing agent fee is £35 plus VAT if the debtor is traced, and a result is usually available within a week.
If the debtor responds but is simply unable to repay the debt in one go, we can help secure a payment schedule and compliance with the same.
If the debtor will not agree to pay, immediately or by instalments, court proceedings can be instigated. The debtor will then have a fixed period in which to respond, failing which judgment can be obtained against them.
If judgment is obtained there are a number of ways to ensure that payment follows. These include instructing bailiffs to seize goods, insolvency/bankruptcy procedures, and placing a charge on the debtor’s property, to force a sale and to be repaid from the proceeds. If the debtor is employed an attachment of earnings order may result in a sum being deducted directly from the debtor’s wages each month until the debt is satisfied. The options are numerous, and the most appropriate route depends on the circumstances in any given case. However, being able to show to the court that the debtor has been given the opportunity to deal with the debt pre-proceedings, and that he or she has been confirmed as residing at a particular address by a tracing agent, assists in moving matters forward promptly and effectively.
The cost of instructing solicitors and using a tracing agent as above can be added to the amount claimed from the debtor, so that in the majority of cases the debtor bears the expense of you having to chase the debt. Where the costs of recovery cannot be transferred to the debtor in full, this can be discussed before any action is taken, so that you can make an informed choice how to act.
Letting matters drift can mean the difference between receiving payment or not. If you are owed money, act promptly and firmly to secure payment. In cases where this proves difficult, enlist the help of cost effective and experienced professionals.
Rachel Stewart, Head of Litigation at Hughes Paddison Solicitors, can explain the debt collection services Hughes Paddison provides to businesses, and can give a breakdown of the costs involved. She can be contacted on 01242 574244 or at ras@hughes-paddison.co.uk
