We are often contacted by those who have an issue with a significant debt owed to them – more often than not – arising from a business relationship.

It’s one of those areas of legal practice – where there isn’t generally much ‘law’ at stake, and we fell that contacts/clients are best served (in large) part by treating the relevant aspect as a commercial matter requiring a personable and practical approach – although we are always delighted to assist.

In terms of those who are owed money (a creditor)’s options regarding the recovery of money that is owed by a ‘debtor’ – We are going to guide you to a really helpful H.M. Government website – which is quite concisely and clearly written, and which we hope might help you rapidly understand your options:-

https://www.gov.uk/options-if-youre-owed-money

Very broadly, a creditor’s first step should be to understand why the relevant sum is outstanding / has not been paid.

A conversation with the debtor often reveals this situation – so pick up the telephone and ask them – We can’t tell you how many debts are recovered merely by ‘reprioritising them’ in the creditors list of ‘things to do’.  

Quite often the reason is reasonably clear from public financial information regarding the debtor, and all people in business – with ongoing relationships with a customer (or supplier) should be keeping a watching brief upon that customer (or supplier)’s financial affairs.

Many credit rating etc. businesses try and sell customers their services – but in large part they are only extracting information from the public record – which in the U.K. (at least) is very easy to access (and receive regular updates from):-

https://find-and-update.company-information.service.gov.uk/advanced-search 

It pays to ascertain whether the debt is something which (largely/simply) can’t be paid (or at least not immediately) – when relevant options might include negotiating a repayment plan by instalments (that the debtor may be able to afford / is prepared to seek to observe), or proceeding with a winding-up petition.

Always remember that you “cannot get blood from a stone” – and when dealing with an insolvent business – encouraging them to enter into a formal insolvency status – might be the best way to draw a line under a relevant debt and understand it will never be repaid in full (or even in part) = “Write It Off” (and focus one’s debt collection efforts better = On more productive conversations).

Alternatively, when a debt can (but won’t) be paid, this usually indicates a dispute between creditor and debtor  – in which case (if the matter cannot be ‘negotiated away’ satisfactorily) – obtaining a court judgement, and then seeking to enforce it is the route to take.

The secret to all good debt collection – is to carefully analyse the situation from all interested parties’ perspectives – including (in particular) the debtor’s position (when you are the creditor); and then work out a tactical plan of action as to how you are going to progress prospective recovery of the debt, before then sticking to that plan of action – including keeping to a timetable which you have made clear to the other side.

One will find that there are a number of services companies (generally 21st-century web-based businesses) who may well be able to help you with what you are seeking to achieve – since most aspects of commercial debt collection do not fall within “reserved business” before the elements of the UK Court System where a Solicitor is required.

Indeed, Solicitors’ involvement is structurally discouraged (in most instances) by our costs of acting not being recoverable against the debtor.

A debt collection programme should be one of logical process and organised progress = Make a plan and stick to it.

We wish you well in terms of recovery of your relevant debts,  and we are fully prepared to assist further – but we do have the not inconsiderable overheads of a fully authorised and regulated firm of Solicitors to meet, before we get to earn anything – So regrettably, modest fees do have to be charged to those who seek the experience and expertise of long qualified Solicitor(s).

Please feel free to discuss any relevant aspects/issues with the writer.

With Kind Regards And My Very Best Wishes

Mr. Dan.Johnson@EquitableLaw.com

Founding Principal – and – Business Law Solicitor

+44 (0) 20 8780 3319 : London D.D. Landline Tel.

www.EquitableLaw.com – Solicitors For Business

N.B. Glossary: Statutory Demand

A statutory demand is a formal written demand for payment of a debt within 21 days. If the debtor does not pay within the 21 days and either fails to apply to have it set aside (where the debtor is an individual), or fails to apply to restrain the creditor from presenting a winding-up petition (where the debtor is a company), the creditor can use the statutory demand as grounds to present a petition to the court for a bankruptcy order or winding-up order.

A statutory demand can be used to support such petitions because non-payment of a statutory demand within 21 days may be deemed evidence of the debtor’s inability to pay its debts (in the case of a company) or to pay the debt demanded (in the case of an individual). For company debtors the sum demanded must exceed £750 (section 123(1)(a), Insolvency Act 1986); for individual debtors it must be equal to or exceed £5,000 (in aggregate) (section 267(4), Insolvency Act 1986).

Good Open Source Further Information Is Available At:- www.gov.uk/statutory-demands