Debt Recovery? We can help...
- Created on Friday, 06 July 2012 08:44
Many people involved in running a business will no doubt have had experience of trying to chase up unpaid invoices or dealing with disputes over payment. Whilst there can be many reasons invoices remain unpaid there are steps that you can take to maximise your chances of being able to recover what is owed to you if the relationship between you and your client breaks down.
Working through your own checklist prior to undertaking work or instructing someone will help ensure that you are able to build up a profile of who you are going to be contracting with. There is little worth in undertaking work or supplying goods to someone who might be a high risk in terms of being able to meet a payment demand.
Before taking any legal action to recover your debts you should write to the debtor setting out your position. If the debtor has cashflow problems, you may consider offering an instalment payment plan as a short term measure. The debtor may have a genuine complaint about your goods or service which you should always seek to resolve before taking action to recover the unpaid amount.
Consider issues such as:
- Who are you contracting with? It is important that you know the legal entity of any potential opponent in litigation as you need to make sure you sue (if it comes to that) the correct party. You will also need an address for service of the Claim Form. Rules on service can sometimes be complicated so obtaining legal advice is important to ensure that you get it right first time.
- Is this person worth suing? If a debtor has filed for bankruptcy or has gone into liquidation or has insufficient assets to satisfy the claim it may be difficult to recover your debt. If this is the case, you may wish to revisit the matter in time but you ought to be aware that some claims can be time barred if you leave it too long.
- Is your invoice likely to be disputed? If so, prepare yourself to receive a defence from your opponent. Does it have merit? If you think there is a risk that the debtor may succeed at court then reflect this in settlement negotiations prior to issuing proceedings.
Preventative measures prior to undertaking work can include:
- Credit checking all new customers.
- Imposing stricter terms and conditions on customers who have delayed payment in the past.
- Setting credit limits according to the level of risk.
- Discussing terms and conditions at the earliest opportunity and making sure your customer signs them before instructing you.
If you need to issue court proceedings half the battle is being able to obtain a judgment in your favour. Sometimes the hardest task is being able successfully to enforce your judgment and start to recover the money that is owed to you. There are many different methods of enforcement which we are able to advise you on based on the information that you can provide about your debtor.
With "business to business" debts you may find if payment is not made you can claim a fixed sum of compensation and interest under the Late Payment of Commercial Debts (Interest) Act 1998 and the Late Payment of Commercial Debts Regulations 2000.
For bulk referrals we are able to offer competitive fee structures. If you would like a free 30 minute appraisal of your debt recovery matters and further details on fees please contact Jason Mingo on Exeter 01392 258451.