; How can a go about recovering debts owed to it-
Learning Center
Plans & pricing Sign in
Sign Out
Your Federal Quarterly Tax Payments are due April 15th Get Help Now >>

How can a go about recovering debts owed to it-


  • pg 1
									When trying to recover debts from suppliers or other commercial debtors, it is
important that a business has good processes and procedures in place. When one step
does not result in the collection of the debt, the business should proceed to the next
step. It is important that these steps are followed strictly. These main steps are
summarised below.
  Invoices, reminder letters and phone calls
  An invoice should set out the date by which payment is due and indicate any
penalties or interest to be charged from that date. It should also outline the debt
recovery actions that will be taken by the company if the debt is not paid. Periodic
reminder issues should be issued, and if no response is received, phone calls should be
made to discover if there is any reason for the non-payment and perhaps to reach an
agreement on payment.
  Letter of demand
  A commercial solicitor can write a strongly worded letter of demand 鈥?also known
as a pre-action letter 鈥?demanding payment of the debt and outlining what actions
will be taken if the debt is not recovered by a specified date.
  Debt collection agency
  Many debt collection companies exist now that can take over your debts for you and
chase them on your behalf. The natures of these arrangements differ, but often it
involves selling the debt at a discount to the company. Your commercial solicitor will
advise you on the use of debt collection agencies.
  Court action
  The formal actions that a company can take at court are:
  A statutory demand A claim to the County Court or High Court, depending on the
value of the debt An online claim through HMCS Money Claims Online
  It is advisable to seek legal advice from a commercial solicitor before commencing
any formal court action.
  Liquidation procedures
  A company can commence a winding up petition to get the company put into
liquidation. This may be used either as an initial action, or to follow up a successful
claim being made in the court in order to enforce the judgment and get payment.
  It is a good idea for all businesses to get a commercial solicitor to look at their debt
recovery procedures and assess whether they are legal and whether they can be
improved. By having the appropriate documents and clauses drafted by a commercial
solicitor, a business can recover substantially more of their outstanding debts.
  Richard Einerhann works for Contact Law, the UK's foremost legal brokerage
company - finding the right company and commercial solicitors and specialist
solicitors for your company's needs.

To top