DEBT RECOVERY

Whether the debt is due from a business or an individual we provide a cost effective service which takes into account the size of the debt, your circumstances and your priorities.

Whether the debt is due from a business or an individual we provide a cost effective service which takes into account the size of the debt, your circumstances and your priorities.   Set out below is a summary of the initial procedure for debt collection by a business. The protocol outlined is detailed and there are adverse consequences, which can cost both time and money, if not followed properly.   Procedures came into force in respect of debt recovery in October 2017 under a so called Pre-action Protocol for Debt Claims (“the Protocol”). The Protocol affects the way your business can pursue debts against individuals. Our experience of working to the Protocol allows us to take the stress out of debt recovery for you and apply a suitable approach against your debtors in which we can take the formal steps on your behalf so as to demand payment.   Who does the Protocol apply to?   Subject to certain exceptions the Protocol applies to any business including sole traders and public bodies who are claiming payment of a debt from an individual. That individual includes a sole trader. The Protocol does not apply to business to business debts unless the debtor the person who owes you the money is a sole trader themselves. The Protocol should always be followed unless there is a need for urgent action.   What is the aim of the Protocol?   There are numerous aims but primarily it is to promote early communication between the parties including an early exchange of information about the debt so as to assist the parties to identify the issues in dispute. Ideally this enables the parties to resolve the dispute in a way without the need for Court proceedings.   So why is the Protocol important?   Failure to follow the various steps and set time lines set by the Protocol may lead to delay in your business recovering the debt along with the real possibility of cost sanctions and reduced interest within any subsequent Court proceedings. It can adversely affect the nature of any subsequent Court proceedings for you. As such it is important to ensure that the correct process is applied to debt recovery from the start to save expensive delays.   What steps do you need to take under the Protocol?        You can no longer send a simple threatening letter giving a short period of time for the debtor to pay. Instead the Protocol requires a letter of claim to be sent which must contain specific information. Thereafter there are further steps which must be taken before any Court proceedings are issued to seek payment of the debt in absence of payment by the debtor. The Protocol applies throughout the debt collection process and it important that it is correctly applied.   Can use of the Protocol be avoided?   Potentially yes. It depends on the nature of the debt and what, if anything, the debtor has said to dispute the debt. We can advise you on this and consider whether or not a statutory demand may be a more effective way of collecting the debt.     If you or your business would like assistance with recovering a debt then please do not hesitate Gareth Archer (g.archer@burywalkers.com) or Lynne Branchflower (l.branchflower@burywalkers.com) or call us to discuss the options in detail.   While professional care and attention has been taken in preparation of these articles, neither B&W Legal Limited or the authors will be held responsible for any errors contained herein, or for any loss or damage caused to any person relying on any statement or omission in the articles and material. While we want you to make best use of the articles, we also need to protect our copyright. Therefore no part of these articles may be reproduced, stored or transmitted in any form or by any means without the permission of B&W Legal Limited