Chasing Debts? Then Read This

A managers worst nightmare is chasing late payments and bad payers.  If someone is not paying what they owe then send a letter before taking any action.  Offer a settlement and inform them you will seek help from a debt recovery agency if the amount remains unpaid. Make sure that your claim for a high court judgement is enforceable, simple things like suing for the correct amount and spelling the debtor’s name correctly.

Starting your claim then check out this Government site for advice.

Cash flow is king to businesses and when debts are not repaid it can be very damaging.

Prevention is better than cure:

• If unsure request 50% of the payment upfront

• Check credit ratings

• Check trade references

• Check online references

• Keep copies of accounts

• Check ratings regularly

• Know the terms and conditions of your contract

If someone is unhappy with you checking these things, ask yourself why. It’s all fairly simple and easy to check. Never take it for granted that a company has a healthy credit rating. With the best will in the world, late payments is an issue for SMEs.

Enforcement options include:

  • third party debt orders
  • bankruptcy/insolvency
  • attachment of earnings
  • charging order
  • County Court Bailiffs
  • High Court Enforcement

The advantage of High Court Enforcement is that it’s cheaper and they only earn a fee when they recover money – they have a real incentive to collect money. However there is a cost of £90 if the money is not recovered.

A High Court Enforcement Officer is an individual authorised by the Ministry of Justice, operating in private companies across England and Wales. They work under the High Court writ of control, which tells them to take control of the debtors goods to the value of the debt. They can recover specific goods, such as machinery or equipment etc.

A County Court judgement can be referred to the High Court if it is more than £600 and no more than six years old – a HCEO can help with forms. When they recover money they have to hold it for 14 days.

Items seized includes things like vehicles and artwork, things with value. Items that cannot be seized include perishable goods, bedding and other necessaries for domestic life and anything clearly belonging to a child. Items are then sold to the highest bidder to repay creditors.

If you plan to buy a product or service for your business in the next 12 months please complete the form below.