Commercial debt is between business entities and derives from unpaid services or goods or failure to perform obligations under a contract. If another business owes you money we can assist you with our commercial debt recovery service. Many businesses pay once they receive a letter from us demanding payment within seven days.
From the outset, we will work with you to ensure we claim all monies you are owed including any interest and commercial debt recovery fees as set out in your contract or agreement with the debtor. Under the Late Payment legislation you may be entitled to interest and late payment compensation, we will advise you on this situation should it arise and work with you to find a solution through our commercial debt recovery process.
- Up to £999.99
- £1,000 – £9,999.99
- £10,000 or more
Alternatively, we can claim interest pursuant to any contractual amount as set out in your terms and conditions/agreement with your customer.
Legal Recoveries are there if at the end of the period there has been no communication or payment from the business. Then, we will begin to discuss Court procedures, timescales, and likely costs involved for commercial debt recovery. We are dedicated to helping you get your money back. We will take you through the step by step process of commercial debt recovery, offering our expert and professional advice from start to finish.
We use the quicker and cheaper Claims Productions Centre to issue claims through the County Court. We are able to handle any of your defended matters up to and including a final hearing. The work is supervised by Rachael Ward, our COLP lawyer (Compliance Officer for Legal Practice).
Once Judgment is obtained and if no payment has been received there are a number of enforcement methods to be considered and a number of reports which we can obtain to help us identify which enforcement method is appropriate. We will advise you on a case by case basis given the circumstances of the matter.
If a debtor fails to pay following the entry of Judgment then there are a number of options to consider to enforce your Judgment :-
- High Court Enforcement Agents – Personnel who are instructed under a Writ of Control to attend at a debtor’s property for the purposes of obtaining full payment of the Judgment debt. Enforcement officers are entitled to seize goods to the value of the debt to be sold at auction in order to satisfy the Judgment.
- Attachment of Earnings Applications – An attachment of earnings application is made to the Court for the debtor to provide information as to income and expenditure for the Court to assess a fair and reasonable payment arrangement. If the debtor fails to provide the information the Court will make contact with the debtor’s employer direct and make an order that monies are deducted from the debtor’s salary each week or month.
- Charging Order Applications Order –. A Charging Order secures the Judgment debt against any property owned by the debtor. The Charging Order will often remain in place until such time as the debtor’s property is sold or remortgaged. In some circumstances, the creditor can force a sale of the property once a Charging Order has been obtained.
Legal Recoveries & Collections Ltd. can assist you with insolvency, the inability to repay a debt, and issues surrounding it. The actions we take include:
- Statutory Demands – This is a formal legal demand for payment and failure to make payment, raise a formal dispute or make contact could lead to a Bankruptcy Petition being issued as it’s often the pre-cursor to insolvency action.
- Bankruptcy Petitions – A bankruptcy petition is presented to the court, allowing a debtor’s assets to be seized and sold to pay off any outstanding debts. Applying for this petition can be difficult, but LRC Ltd. makes the process as simple as possible for you.
- Winding-Up Petitions – Following the issue and service of a Winding Up Petiition a company can be forced into compulsory liquidation. The assets of this company will be distributed to the creditor before the business is dissolved.
During the collections process we can obtain a Mini or full Asset Trace Report about your customer which would provide us with information that we can use to determine the most appropriate action to take. The reports are in-depth and include: associated addresses, insolvency details, legal proceedings, target company/business research, active directorships, dissolved directorships, overseas directorships, non-limited company research, shareholdings and land registry searches.
From the start of our relationship we will:
- Save you time and valuable resources in the collection of money owed
- Devise strategies to maximise recovery of your debts
- Provide you with continued support. advice and assistance throughout the debt recovery process
- Ensure that your reputation is protected at all times by always acting in a professional, compliant and ethical manner
- Provide you with Debt Manager access to enable you to keep yourself updated as to the progress of your cases at all times
If you have any questions about our service or would like to discuss your matters with us in greater detail, please contact the Business Development Team on 0330 024 6342
A. You need to weigh up whether the expenses and energy spent in recovering the debt is justified by the amount you are owed. Sometimes, it might be financially reasonable to write off small debts, however this could set a precedent for the future. Always investigate why you have not been paid; for example if your client is unhappy with the service they’ve received, you might want to rectify that first.
It is also very important to check whether your debt has not been paid by a limited company due to it’s insolvency. You can do this by checking the Government website, Companies House: https://find-and-update.company-information.service.gov.uk/.
Detailed credit checks are also recommended prior to commencing Court action to ascertain the liquidity and credit worthiness too.
If you are still unsure whether or not your commercial debt is worth pursuing, speak to a member of our team for advice.
A. The first thing to remember is that you are running a business, so a client who doesn’t pay on time is probably not as valuable as you think they are. It’s always a good idea to discuss the situation with the client before pursuing legal action to see if there is a way you can reach an agreement. Perhaps they are experiencing cash flow issues and have a legitimate reason for delaying payment.
Failing that, the next step is to send a Letter Before Action (LBA) which sets out what is owed to you and gives a timescale to pay it in. We can help with this process – Many businesses pay once they receive a letter from us demanding payment within seven days.
A. Definitely not. Starting a legal process does not commit you to follow through all the available steps and you can choose to stop chasing a debt at any time. You remain in control and you’ll be kept up to date with the progress of your case at all times.
A. In a perfect world there would be a written agreement, purchase order and delivery note, however you essentially need proof that the client requested your service or product and that you delivered it. Keep hold of all correspondence such as emails and texts as these could be used as evidence for any legal proceedings.
A. Under the Late Payment of Commercial Debts (Interest) Act 1998, after 30 days you are entitled to charge interest at the Bank of England base rate plus 8%. You can claim for debt recovery costs, which start at £40 per invoice.
Alternatively, if your terms of business stipulate a set rate of interest you should claim this, this is known as “contractual” interest.
If a client has cash flow problems, it may be worthwhile negotiating some kind of compromise with part-payment and a rescheduling of the debt. This could help you to maintain your business relationship whilst also ensuring you get paid. If this fails and you have to pursue a legal claim, it at least shows that you have attempted to resolve the situation fairly.