Commercial Debt Recovery
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Recovering owed debts can disrupt the smooth running of your business. We offer a range of debt recovery services, including sending letters before taking legal action.
Recovering owed debts can disrupt the smooth running of your business. We offer a range of debt recovery services, including sending letters before taking legal action, managing court proceedings, handling disputed claims, setting up payment agreements, and dealing with insolvency matters. With our help, navigating debt recovery becomes simpler for your business.
Commercial debt recovery refers to the process of retrieving unpaid invoices from companies or individuals that are obligated to make payments to a company.
Governed by the Late Payment of Commercial Debts (Interest) Act 1998, this procedure aims to maximise recovery by not only seeking the outstanding amount but also claiming interest and debt recovery costs when a payment is overdue.
In cases where a payment date is not agreed upon, the law deems the payment late 30 days after the customer receives the invoice or after the goods or services are delivered, whichever is later. Commercial debt recovery ensures companies have mechanisms in place to support payment agreements, protecting their financial interests and promoting fair business practices.
Here is the process of commercial debt recovery:
1. Letter Before Action: A letter before action is a formal letter that outlines the debt owed, the payment timeline (usually 7 to 14 days), and explains the consequences of non-payment.
2. Court proceedings: If you don’t get an acceptable response from the letter before action, legal action follows. Court proceedings are initiated at the County Court, prompting the debtor to pay the debt, including interest and costs, within 14 days. The Late Payment of Commercial Debts (Interest) Act 1998 applies, incorporating a fixed sum compensation per invoice.
3. County Court Judgment: Upon the expiration of the County Court Claim, a County Court Judgment (CCJ) is obtained. This court order confirms the debtor's liability to pay the debt. A CCJ affects creditworthiness, impacting the debtor's ability to obtain credit and other financial activities. The CCJ will outline how much is owed, how payment should be made, payment deadlines and who needs to pay.
4. Enforcement: With a CCJ in hand, the focus shifts to enforcement. Various methods, including attachment of earnings orders or charging orders, can be employed. However, the most common approach involves instructing a Bailiff or High Court Enforcement Officer to collect the debt or seize goods equivalent to the debt's value. This phase is crucial in realising the recovery of the outstanding debt.
Efficient cash flow is pivotal for the growth of any business, and our team of debt recovery solicitors understand the urgency of swift and effective action when it comes to commercial debt recovery.
From writing letters before action, supporting claim submissions to mediation services, defence in legal actions, enforcement, negotiation, and advocacy, we cover it all. Our expertise extends to handling disputed claims, counterclaims, payment agreements, and insolvency actions, including bankruptcy, winding up, advice on debtor's petitions, Individual Voluntary Agreements (IVAs), Company Voluntary Agreements (CVAs), and post-insolvency trustee liaison.
Throughout this process, we offer transparent and easily understandable charges, adhering to the regulations set by the Solicitors Regulation Authority. At every stage, we make sure you are well informed about the expenses involved, clarifying which costs are recoverable.
At GloverPriest, we provide friendly and transparent legal advice. If you would like further advice on commercial debt recovery, please don’t hesitate to speak to one of our expert contract solicitors today. Complete our enquiry form.
Firstly, a formal Letter Before Action is issued, outlining the debt and payment terms. If an acceptable response is not received, court proceedings are initiated at the County Court. Following this, upon the County Court Claim's expiration, a County Court Judgment (CCJ) is obtained, confirming the debtor's liability. Finally, with a CCJ, enforcement actions like attachment of earnings orders or involving a Bailiff or High Court Enforcement Officer are used to collect the debt or seize goods, to recover the outstanding debt
The very first step in commercial debt recovery is presenting letters before action or late payment demands to the other party. This includes lettering and telephone debt collection. Many debt recovery disputes can be settled at this point because an official letter drafted by a solicitor is often enough to prompt the other side to settle outstanding debt.
In addition to claiming interest, businesses can charge a fixed sum for the expenses incurred in recovering a late commercial payment. The allowable charge depends on the amount of debt and can only be applied once for each payment. As a supplier, you also have the right to claim reasonable costs each time you make an effort to recover the debt, offering additional protection and compensation for your efforts in the debt recovery process.
A cohabitation agreement can address aspects like sharing assets, accessing state pensions, and establishing next of kin rights during medical emergencies. Additionally, cohabitation agreements can facilitate the fair division of bills and other responsibilities while living together.
If the debts aren’t paid, the matter can be escalated to court proceedings and bailiffs. Interest and other costs can add up over time, so it is best to settle any outstanding debts as quickly as possible.
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