We know recovering debts is an important part of running your business, and understand that sometimes taking legal action is the only remaining route to explore.
When customers and clients refuse to pay you for goods or services you provide, the act of recovering debt can be both costly and time consuming. With this in mind, you need someone you can rely on to arrange your business debt recovery easily and quickly.
Here at First4lawyers, we have the expertise to help recover money owed to you by using all the tools the law provides.
Is it always worth pursuing overdue debts?
It is important to be sure that you have a realistic chance of recovering a debt, and that seeking payment is worth the effort and expense.
It may be sensible to write off small debts of less than £100. However, you may also wish to consider whether this would encourage other small debtors not to pay in future.
For larger debts, your first step is to find out why the customer has not paid yet. It may be that they’ve simply forgotten to make a payment; so contacting a lawyer at this early stage may be a little hasty.
If you are facing a dispute over a service or goods you supply on a regular basis, it becomes harder to recover the debt without first resolving any issues.
If the customer has cash flow problems, it may be wise to reschedule the debt and negotiate part payment in instalments. While this may not be ideal, part payment is certainly better than no payment.
If the customer or client already has outstanding county court judgments against them, it is likely that you’ll find it harder to recover the debt. You may wish to check the Register of County Court Judgments before pursuing payment.
Can I charge interest on overdue debts?
You may use the contract between you and a client to specify a credit period and to state how you will charge interest on overdue payments. You must include terms in line with the Late Payment of Commercial Debts (Interest) Act 1998.
Where there are no terms relating to credit in the contract, the law allows you to charge interest at a set rate. This is the Bank of England base rate (fixed every six months) plus 8% from the end of a notional 30 day credit period (this is usually the date of your invoice).
When should I use a solicitor?
Using a commercial solicitor to recover debts can save you time and money. The best solicitors for this type of work are experienced specialists. You may find that customers are quicker to pay up – either in full or by instalments – when faced with the threat of legal action.
You may have a better chance of keeping the customer if you and your solicitor do not pursue the matter through the courts. You should try instead to resolve any debt in an amicable manner with an out-of-court settlement.
I want to take legal action to recover debts – where do I start?
You should start by contacting legal professionals who will act with your needs and those of your business and livelihood in mind.
The specialists you gain access to with First4lawyers are skilled at helping to recover debts. If you are concerned about how your relationship with a client might be affected by involving solicitors, know that we can act with the utmost care and diplomacy.
Call us directly, or fill out the Request a Callback form at the top of the screen and we’ll be in touch with you soon.