Debt Recovery – is it worth it?
I have a debtor who owes me £1,500 and just refuses to pay! What can I do to get my money back from him?
Good cash flow is central to all businesses, and our team know that you need to take prompt action to recover outstanding debts. But you also need to ensure any action you take is cost effective and successful.
Before pursuing a debt, you should send a Letter Before Action, explaining that you will issue Court proceedings if full payment isn’t received. The letter lets a debtor know that you are serious about pursuing the outstanding money owing. If you don’t receive a response, then your next step is to issue a County Court claim.
You can issue a County Court claim online through Money Claims Online or on paper through the central Money Claims Court. You will have to pay a Court fee which depends upon the value of the claim, and provide details about what money is outstanding. You are entitled to add statutory interest at 8% together with recovering legal fees.
For a claim of £1,500, the Court fee is £80 and our fixed fee for issuing the claim is £80.
Once you’ve issued a claim the debtor has 28 days to accept liability and arrange to pay, or file a Defence to the claim. A Defence explains to the Court why the debtor doesn’t think he is liable to pay.
If you don’t receive full payment, you can apply for a County Court Judgment to be entered against the debtor – which will then sit on their credit file for 6 years. You can also look at enforcing the judgment – whether that’s through bailiff attendance, charging orders or third party debt orders. You can also petition for an individual’s bankruptcy. However, it’s important to weigh up the Defendant’s financial circumstances before making a decision about how to proceed.
Although you can issue a small claim (anything less than £5,000) yourself, a solicitor can give you advice about the prospects of success and the most effective way of pursuing the matter. We have an innovative fixed-fee debt recovery service so you always know what your costs are at every stage of the procedure. Throwing good money after bad makes little business sense so we advise on the most proactive methods of collection to get the right results quickly, whilst always taking the associated costs into account.
Our Litigation team know that you want to recover your money quickly without spending a fortune. We can help you determine the most effective way of recovering money owed to you.