Feakes & Co Solicitors
Monmouthshire NP16 5UH
Tel: 01291 639280
Fax: 01291 606076
Debt Recovery/Enforcing Judgments
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. If you 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.
Outstanding debts invariably also have an impact on cashflow, and 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 – or at least threaten – making them bankrupt or winding up the company. When an individual is made bankrupt, their assets and income are controlled by the Trustee in Bankruptcy, who 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 way of getting your debt paid.
Getting A Debtor To Pay Up
When you instruct us to recover your debt, we will demand that the debtor pays up within 7 days, and that they pay your legal costs. Our intention is that you will not be out of pocket on a successful claim, so that you receive all sums recovered from the debtor, and at no cost to you.
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.
Sending A Statutory Demand
If the debtor is refusing to pay the debt they owe you, a good next step is to send them a statutory demand. This is a formal demand for the debt to be paid, which sets out details of the debt. It is the first step towards the bankruptcy of the debtor, or a winding up petition to liquidate a company.
If your debtor is an individual, they have 18 days after receiving the statutory demand to pay the debt, or dispute it. If they do neither of those, then you may present a bankruptcy petition to the court. The debt must be £5,000 or more for you to present a petition.
For a company debtor, you can serve a statutory demand in the same way, and they have 21 days to pay or dispute the debt. After that, you can issue a a winding up petition at the court. The minimum debt is £750.
Make A Free Enquiry
All initial enquiries are completely free of charge. Call us now on 01291 639280, email email@example.com, or complete our Free Online Enquiry for a free no-obligation discussion, and let us explain your legal rights and options.
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