As with any business, cash flow is key. But for a small/medium size business, it’s never more important. If you have persistent, outstanding debtors, taking advantage of you and your goodwill, we can help. Sometimes you just need to 'shout a little louder' than the others when chasing payment.
Pearcelegal offers a fixed-fee, debt recovery service to assist you in achieving settlement of outstanding debts and invoices.
Recovering commercial debts from unwilling debtors is often never an easy step for businesses to take. It can be confusing and time consuming. Our debt recovery service is broken down into 3 simple and clear stages and you are under no obligation to proceed to each stage. We act on your instruction.
Stage 1 - Letter Before Action
Before issuing any legal proceedings, a Court compliant Letter Before Action should be sent to a debtor. Essentially, this letter sets out exactly what is owed, how it is owed and when it needs to be paid. More often than not, a Letter Before Action will prompt payment from a debtor concerned about legal proceedings being issued against them and/or their business which, amongst other things, may affect their credit rating and ongoing ability to trade. At the very least, it may prompt negotiations as to a suitable repayment plan. The cost of us sending a standard Letter Before Action is fixed at £50 + VAT.
Stage 2 - Issuing a claim at Court
It happens. A debtor simply ignores a Letter Before Action or you don’t receive a satisfactory response and you have to decide whether to pursue the debt further or write it off. If you choose to issue County Court Proceedings to recover monies owed to you, we will prepare and send the Claim Form on your behalf, making sure all the Court requirements are met. Issuing Court Proceedings is a formal process where the debtor will be sent a Court document requiring them to either pay or dispute the debt. Interest, costs and compensation is added to the debt as appropriate. There will be a Court fee payable and our costs preparing the Claim Form on your behalf and the amount of both will be dependent upon the amount of debt owed to you.
Stage 2.5 - Obtaining Judgement
If the debtor fails to respond to the Court forms, after 14 days, you can apply to Court for a County Court Judgement (CCJ) in your favour. The CCJ is a legally binding Court Order confirming that the debtor owes the debt to you and gives you the power to take enforcement action to collect the debt. This is called an application for Judgement in Default. The cost of making this application on your behalf is included in the Stage 2 costs.
Stage 3 - Enforcement
Once a CCJ has been obtained, it’s possible to take action to enforce the debt immediately. The most common method of enforcement is to instruct the County Court bailiffs to attend the address of the debtor to collect debts or seize the goods. For any debt under £600, we will instruct the County Court Bailiffs on your behalf at a cost of £100 + VAT and the Court fee of £110. For debts over £600 you can choose to ‘transfer’ to the High Court and instruct the High Court Enforcement Officers to enforce the debt on your behalf. This is a faster process than using County Court enforcement but there are increased costs involved should you choose to do so. For debts over £5,000 you must use the High Court for enforcement.
For further details or a no obligation discussion please call 0121 270 2700 and ask to speak to a member of our litigation department. Alternatively, complete our online form and one of our team will be in touch.
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