Unpaid bills and bad debts are a common problem for all businesses. If outstanding debts can be brought in promptly and cheaply, it can improve a business’s cash flow - sometimes making the difference between survival and closure.
There is never a good time to be owed money, but in a time of recession and recovery it can be galling to know that somebody has the benefit of your time and skill but has not paid you for it. We understand this is particularly hard for small businesses who need to be paid for their work, but are confused or frustrated by the legal processes involved. Fylde Law uses qualified solicitors for debt recovery and we have a high rate of recovery of debt.
At Fylde Law we can offer our business customers and private individuals a number of services to help you recover your outstanding debts cheaply and quickly.
Managing Your Debtors
The chasing of and management of outstanding invoices can place a heavy burden on your business’s resources and time. Chasing payment from people that you do business with and might still wish to do business with is never a pleasant task.
At Fylde Law, we are happy to deal with the management of your debtors. This includes:
We can offer the services listed above either on an individual service by service basis at a fixed price, or alternatively, we are frequently happy to utilise a Damages Based Agreement, where you do not pay for our services if we are unsuccessful in recovering the money owed to you. For more information on Damages Based Agreements, please see the special section further down this page.
How much will it cost?
There are a number of ways in which our debt recovery services can be paid for. We offer a transparent and easy to understand fixed fee arrangement, where you pay a fixed fee for each step we take to recover your debt. These include:
A Letter of Claim
This is a formal solicitor’s letter, detailing the precise amount of money owed to you and the legal basis upon which the money is owed. The letter contains a clear and unequivocal threat of court action if immediate payment is not made by your debtor.
In a high percentage of cases, this letter alone is sufficient to make sure the debtor repays you.
This service also includes a chaser letter to follow the letter of claim in the hope that this will ensure that your debt is recovered, without the need to issue a formal court claim.
Issuing Court Proceedings in the County Court
Fylde Law can offer you a service to conduct your claim in the County Court, to obtain a County Court Judgment against your debtor for whatever sum is owed, plus court fees and some legal costs.
The cost of this service depends upon the amount being claimed and the complexity and nature of the debt. Please call or e-mail us for more details with regard to this service.
Damages Based Agreement
Fylde Law can also offer to conduct your debt recovery claim on the basis of a Damages Based Agreement. This is essentially a "No Win, No Fee” Agreement, where you will not pay us anything if we do not recover your debt for you. If we fail to get your money, you pay us nothing. However, if we recover your debt, we will take a percentage out of the money we recover for you.
Please contact John Blott to discuss this on 01253 730 070 or contact us via the ‘quick enquiry’ form.
Why use Fylde Law?
Fylde Law Solicitors have considerable experience of debt recovery for our clients. We utilise all measures available through the court and elsewhere to ensure that your debt is recovered for you. This not only includes the administration of your debt and a court claim, it also includes the enforcement of any judgment against a debtor for you.
Enforcement is frequently necessary because the order of a County Court Judgement does not guarantee your debtor will pay you the money he owes. If he does not pay you after the CCJ is ordered against them, then the Judgement needs to be enforced.
Enforcement includes a range of measures such as the instruction of Bailiffs to recover property to pay your debt, freezing orders on your debtor’s bank accounts and bankruptcy proceedings against your debtor to recover your money.
Problems and Pitfalls with Debt Recovery
It is important that you realise that there is nothing to be gained by pursuing a debtor who has no money and will not be able to pay. You should always consider whether he is able to pay, prior to instructing us or commencing any kind of action against them.
It is also important to consider the type of organisation you debtor belongs to. Is it a limited company? Is it a partnership? Is it a sole trader or private individual? Do you know whether he has any assets such as a home, motor vehicle or company property. Is the company or business a profitable business to the best of your knowledge?
Part of our service to you is to help gather this information, but the more information we have about your debtor, the more likely we are to be able to advise you at an early stage as to the best method of recovering your debt. It will also maximise our chances of being successful in our actions.
What shall I do now?
If you, personally, or your business is owed debts by another business or private individual, you should contact John Blott, who heads the Debt Recovery Team, on 01253 730 070, or by emailing us using the 'quick enquiry' form at the top of this page.
Some Frequently Asked Questions which might help you
What should I do before I ask Fylde Law to help me?
The first consideration of all, if you are thinking using the legal system to get an invoice paid, is "Can the person pay?” If he cannot, there is no way of recovering your money and the law is of no use to you. Having said that, some people are still willing, as a matter of principle, to obtain a CCJ (County Court Judgment) against a debtor, as the CCJ will show up on credit rating systems and will alert credit lenders and other businesses that this person or business do not pay what they owe. Also, whilst the debtor may have no money now, this might not always be the case, and a CCJ will protect you from the 6 year time limit for recovering debts.
Before a money claim is issued, you must have taken all reasonable steps to avoid going to Court, by notifying the debtor of your claim and providing all relevant information concerning your claim. This can be done in a Letter of Claim. The Letter of Claim should comply with the Practice Direction on Pre-Action Conduct. At this stage, many debtors pay up.
How much are the court fees that I will have to pay?
If a Letter of Claim fails to get your money paid, you will need to issue a County Court Claim Form.
You will have to pay a Court issue fee, which varies with the amount of the claim (ranging from £35.00 to £10,000) and is recoverable from the debtor.
By way of example, if your debtor owes you less than £3,000.00 the court fee is £115.00, for debts of less than £5,000 the fee is £205.00, for debts of less than £15,000 the fee is £550.00 and so on rising very steeply with the value of the debt. The debtor will be ordered by the court to pay you back those court fees if you win your case.
Can I claim interest on the money owed to me?
If your Terms of Business do not state a different figure, 8% interest is payable on the claim until you have your CCJ. If your claim is for £5,000 or more, interest continues to be payable until the claim is fully paid.
If the claim is against another business, then the Late Payments of Commercial Debts (Interest) Act applies and you may be entitled to an enhanced interest rate, additional compensation and reasonable recovery costs. We shall advise whether this applies in your case.
Will my business relationship be destroyed if I take my debtor to court?
Not always. If the service you offer to your debtor is an important one, do not be surprised to see you debtor continue to seek to utilise your services or buy your product. After all, business is business.
It may be better in the long run for your business if you wait patiently for payment. On the other hand, it is easy to be strung along by promises and empty words, then one day the company which owes you money is dissolved.
If your debtor is a "can pay but won’t pay” and you decide it is right for you to take legal action, we are here to help you.
Can I use Fylde Law wherever I live in UK?
If you or your business is based in England and Wales, the answer is yes. Fylde Law carry out debt recovery work for private individuals, small and large businesses all over England and Wales.
What options are available to me if my debtor doesn’t pay me after the court orders them to?
Many creditors are unpleasantly surprised to discover that a CCJ does not force the debtor to pay. Further proceedings must be taken to enforce it. There are various methods of enforcement and we shall be happy to advise what is best for a particular case. The methods are as follows:
1. Bailiff action (a Warrant of Writ of Control)
County Court bailiffs are actually very poor at recovering money. This is partly because they are too many Warrants for the number of bailiffs and partly because they are salaried, so they have no incentive to try hard. If your debt is more than £600 and your debtor owns assets such as a car or other valuables, you should transfer your case to the High Court. Their enforcement officers do not get paid if they are not successful and their charges have to be paid by the debtor.
2. Recovering the money through an employer (an Attachment of Earnings Order)
This is a straightforward method of recovering money if your debtor is an individual and you know the identity of the employer. However, the Court decides the rate of payment, according to how much the debtor earns.
3. Recovering the money from some other person who holds money for the debtor e.g. a bank (a Third Party Debt Order)
You need good information to be able to use this procedure, so it is not often used.
4. Securing the debt onto an asset such as the debtor’s home (a Charging Order)
It is always worth considering whether to secure the debt on property. It does not prevent you from using quicker methods to recover your money and it prevents the debtor from selling the house without paying you, although there needs to be sufficient equity in the house to pay the debt owed to you.. You also have the option, in the case of a deliberate refusal to pay, of applying for an Order for Sale.
5. Requiring the debtor to disclose his means (an Order for Questioning)
This is not strictly an enforcement method. It compels a debtor to disclose financial information (bank accounts, properties owned etc.) so it can be very useful as a precursor to choosing the best enforcement method. The only drawback is that the Order must be served personally on the debtor, so it can become expensive if a process-server is used.
6. Bankrupting the debtor (a Statutory Demand)
The threat of bankruptcy can be very persuasive. But actually bankrupting somebody is rarely the best option. This is because it is very expensive and you will have no priority above other creditors when the Receiver distributes the proceeds of sale.
Please feel free to contact us to discuss what is best for your case. The cost of recovering your money will depend upon the amount of work which we do. Sometimes the money can be recovered quite quickly sometimes the chosen method of enforcement involves a lot of work.
In many cases, a Damages Based agreement may be appropriate. This is where we agree to try to recover your money for you on a no win no fee basis. If we fail, you pay nothing. If we succeed, we take a percentage of what we recover for you.
If you would like advice tailored to your case, please contact either John or James on 01253 730 070.