Maintaining positive cash flow is critical to most businesses and so effective means must be deployed to recover unpaid debts. Undue delay in seeking to recover outstanding payment often results in such debts going bad.
Many businesses wrongly assume that instructing solicitors to commence debt recovery action is slow and expensive. Still more think that there are other cheaper solutions to recover bad debts. MJD Solicitors provide fast, cost effective and results driven debt recovery solutions to suit all budgets.
In our experience, there is no single preferred solution to recovering bad debts. The route that should be taken depends upon the nature of the debt, the parties to the debt and the risk that a Claimant is willing to assume in taking recovery action.
Options for Debt Recovery
Businesses have a number of options to recover payment. These include:
- the issue of a statutory demand upon a business or individual
- the threat or implied threat to wind up
- the issue of a winding up petition or bankruptcy petition
- A Solicitors 7 Day Letter
- Letter of Claim
- The issue of County Court or High Court Proceedings
- Default Judgment and Summary Judgment
The first three avenues often result in immediate payment, but they also carry significant risk for the unwary. MJD Solicitors has experience in utilising all of these avenues to recover payment and is able to advise when and when not to use such mechanics to realise your debts.
Business to Business Debts
These are covered by Late Payment Legislation that obliges the debtor to pay interest at 8% over base rate and statutory compensation of up to £100 in respect of costs incurred in recovering late payments. This compensation is in addition to any payments that creditors are entitled to when they issue court proceedings. As a result, in many instances, all costs incurred instructing MJD Solicitors to pursue late payments are recoverable.
Where a debt is disputed then it is necessary to issue a Letter of Claim in accordance with the Practice Direction on Pre-Action Conduct or the applicable Pre-Action Protocol. With the right solicitor it is not uncommon for debts that were previously disputed to become discharged using this process, thereby avoiding the need for court action and the costs and risks that are associated with such action. MJD Solicitors have extensive experience of securing payment of disputed debts using these processes.
Call 01277 280760 today for effective help and advice.