At LRC we offer bespoke debt recovery solutions to a wide range of businesses and organisations in the public sector. Through our many years of experience, we have handled over 323,000 cases with a value of over £525 million both in the UK and overseas. We have put together this article to help you better understand the process of debt recovery. We want you to know and understand the processes in place to help your organisation take back money that is owed to you. As a business, it’s critical that you get paid what you’re owed by your customers and your clients. Late payments, and people trying to avoid paying for goods and services, can be costly to your company and have long-lasting and damaging repercussions.
Get in Contact or Invoice as Normal
When pursuing payment from a client, it’s very important to start as you always have. Send out an invoice as you and your client will have already agreed on how you will be paid. All you should do next is sit back and wait for confirmation of the full payment. Harassing them at the beginning will end up with them actively avoiding you and could turn into a legal complaint being made against you. Make sure you have all the relevant and up to date facts before you contact the client by phone. Make sure to speak to them as normal, why not try to kill them with kindness which will throw them off?
The Next Step
After you have gone ahead with standard procedures and it turns out that you haven’t been paid by a client, then you should begin a process of chasing up the invoice. You could do this by sending emails, phone calls or letters reminding them that the payment is due. Mention the fact that work will stop and legal action may ensue. By threatening to stop working for them this tends to result in a reply, e.g if a business is unable to continue without the services that you provide. But, if this doesn’t result in you receiving your payment then you have other options to explore.
This is the last opportunity your client will have to respond to you before you take it before legal proceedings begin. This highlights to them that they have until a certain deadline, which you can decide, to settle any debts with you before you begin pursuing legal action against them to claim the money you’re owed. If this doesn’t get a response then you will be left with only a few options to pursue to claim back what you are owed.
Making Your Claim
Paying for a mediation service can save you money in the long-run, and involves a trained person acting as a conciliator between you and your debtor. If you do decide to take legal action, the court will refer you to have attempted mediation beforehand.
Small claims court
The small claims court will allow both sides (you and your client) to mediate and reach a conclusion. This will usually mean the client is ordered to repay any debt, interest and fees, which have been accrued as a result of having to pursue legal action.
Using a solicitor
If you’re not able to come to an agreement, it can be helpful to discuss your case with a solicitor who is experienced in debt recovery. For a fee, they can write a letter to the person who owes you money. The letter can tell them that legal action will be taken if they don’t pay. A solicitor’s letter often produces quick results. Talking with a solicitor can also help define your case in legal terms and help identify further action that may be available to you. Sometimes solicitors will work to a fixed fee, or charge an hourly rate.
The other legal option is to enlist a debt collection agency like LRC. We would liaise on your behalf or help to enforce any decisions made in court. For example, if the client is unable to pay the outstanding sum, it may lead to insolvency proceedings and bailiffs being called in to retrieve assets equalling that amount.
More About LRC
LRC are a specialist debt recovery legal practice based in Nottingham with a nationwide client base. We were established in 2002, having formed via a management buy-out from an international law firm. LRC was one of the first debt recovery companies to gain Alternative Business Structure (ABS) status by the Solicitors Regulation Authority (SRA) in October 2015, enabling us to operate as a legal practice and conduct litigation.
We provide a complete and cost effective service which includes pre-legal collections, litigation, judgment enforcement and insolvency actions, as well as ancillary services associated with debt recovery including credit control and tracing.
We are members of the Credit Services Association (CSA), which is the UK debt recovery industry’s trade association. LRC’s adherence to the CSA’s code of practice ensures quality and professionalism in the services we provide.
We are committed to delivering high quality services and since 2010 have had ISO 9001:2008 accreditation.
We have also recently been accredited with ISO 27001:2013, the international information security standard.