Chasing outstanding debts is frustrating and time-consuming. If you have supplied goods or services which have not been paid for, your customer is benefiting from your hard work while forcing you to chase them to pay for it. You might have made a loan to a friend or relative which they have not repaid. The relationship is probably suffering as well as your bank balance. Or you could have got a judgment – how do you enforce it?
Outstanding debts invariably also have an impact on cashflow. Where the sums involved are large they can sometimes sink an otherwise healthy business. If it is a personal debt, it can put you in a difficult position financially.
However, the good news is that chasing debts is a lot easier than it used to be, and can even be cost-neutral.
Bankruptcy And Winding Up
If your debtor refuses to pay their debt to you, then ultimately you may need to consider making them bankrupt. Or winding up the company. At the very least, you may need to threaten it. When an individual is made bankrupt, their assets and income are controlled by the Trustee in Bankruptcy. The Trustee then pays off their debts. When a company is wound up, its assets and income are again taken out of its control so that its debts can be paid.
The threat of bankruptcy and the personal and professional consequences is a very powerful tool against a debtor who refuses to pay. Similarly for a company: no director wants to have their company wound up. It can be very quick and effective part of your debt recovery strategy.
Our Debt Recovery Service
When you instruct us to recover your debt, we will demand that the debtor pays up within 7 days. We will also demand that they pay your legal costs. Our intention is that you will not be out of pocket on a successful claim. You should receive all sums recovered from the debtor, and at no cost to you. Our fees start at £150 (ex-VAT) for a letter of claim and chasing letter.
If you are a business, there is a further sting in the tail for your debtors. They must also pay you compensation, plus interest, on each outstanding invoice. The compensation is between £40-£100. Small sums perhaps, but with a number of outstanding invoices, it can add up. If the invoices are outstanding for many weeks or months, then the statutory interest is worth having too: the rate is set at 8% above the Bank of England base rate.
The ideal outcome will see the client receiving the original sum owing, plus compensation, plus interest – all at no cost.