The Process of Commercial Debt Recovery

In the modern business world, late payments and outstanding debts are an unpleasant drain on resources and can damage company reputations. For this reason, many people now choose to use professional debt recovery support services, but without understanding how these operate it can be difficult to make an informed decision.

It is best to contact a debt recovery solicitor as soon as reasonable after the payment deadline, particularly if it is suspected that the customer does not intend to meet their bills. For many reasons, it can be inappropriate for businesses themselves to approach debtors: specialist solicitors have enough distance from the transaction to be able to remain neutral and defuse any conflict. In the first instance, a letter commonly referred to as the ‘letter before action’ is sent to the customer, asking the debtor to settle their account within a specified time frame. This letter clarifies the legal situation, explaining that should the bill not become paid within an suitable length of time, further costs could be incurred and court proceedings would be started. In many cases, this letter is sufficient to prompt a customer into clearing their balance. However, if this is not the case and the debtor does not respond to this letter, solicitors are able to proceed to the next stage.

This is the issue of a County Court Claim Form, an official document which gives details of the amount of the debt to be recovered, any court fees for which the debtor will be liable and information regarding any interest payable on the debt. After this form is processed, the County Court Claim Form is sent to the debtor themselves, confirming that the official proceedings have begun and giving a clear timescale in which the debtor is able to respond. Again, if the debtor chooses not to respond to this, the process can advance on to the judgement. This court order states the figure of the debt and the date by which payment must be made.

In the event that a client disputes the claim that they are in debt to your business, debt recovery solicitors are able to offer sound legal advice as to how to proceed. This is why it is important to take advice from a qualified and experienced solicitor in your area, who will be able to offer the best quality counsel for each case. Moreover, experienced solicitors will put together the best case should there need to be a court appearance.