12th March 2019
Recovering Debts At No Cost
It is fairly well known that when business-to-business debts are recovered the creditor can charge the debtor interest and costs. These rules comes from the Late Payment of Commercial Debts (Interest) Act 1998, which allow the creditor to charge fixed costs plus interest on the debt (even if there was no reference to interest in the original contract).
We have represented many business clients in the Forest of Dean who have used these rules to their advantage. While no-one wants to have to chase debts, the fact that you can charge interest of 8% or more on them – and get your legal costs back – is a real bonus. It is also an incentive for the debtor to pay up quickly.
Our experience is that once an initial solicitors’ letter is sent to the debtor, with the threat of paying interest and costs, our clients receive the sums they are due very quickly.