Commercial Debt

Letter before Action, Interest and Compensation

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 debt recovery fees as set out in your contract or agreement with the debtor or, or alternatively interest and late payment compensation under the Late Payment legislation.

Debt Value

  • Up to £999.99
  • £1,000 – £9,999.99
  • £10,000 or more

Late Payment Claimable Charges

  • £40
  • £70
  • £100

Alternatively, we can claim interest pursuant to any contractual amount as set out in your terms and conditions/agreement with your customer.

Legal Recoveries

If at the end of the period there has been no communication or payment, we would discuss Court procedures, timescales and likely costs involved for commercial debt recovery.

Claim Form

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).

Judgment

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.

Enforcement

The most common types of enforcement we use are High Court Enforcement Agents, Attachment of Earnings Applications and Charging Order Applications Order.

Insolvency

LRC can assist you with insolvency actions including Statutory Demands, Bankruptcy Petitions and Winding-Up Petitions.

Asset Trace Report

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

Commercial Debt Recovery FAQs

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.