Commercial Debt Collection – What’s the process?
This article concentrates on the recovery of commercial debts. Every debt for each client is dealt with in a unique and personal way, however there is a baseline procedure which is followed on each type of debt. This article will outline the process our no win no fee collection of commercial debts.
1 – Pass the information
- Of course, to be able to begin collections, we need any information regarding the debt and the debtor. These details can be submitted online or by email by asking for and returning our instruction form.
- Any information that you would deem useful for us to make the necessary collections should be sent.
2 – The First Letter
- Upon uploading the debt to our system, we will send a Letter Before Action. This is a letter of legal requirement which consists of all the debt information, including the outstanding balance, and the
date when the payment must be made.
- After a period of time (14 days for limited companies), late payment fees will begin to be added to the original commercial debt, with optional additional late payment interest of 8% above the bank base rate which can be added – more information on this can be found on the Government Website.
3 – Contact Attempted
- Scott & Mears will make attempts to contact the debtor to negotiate a payment or payment plan up until the payment deadline given.
- Should no contact, agreement or payment be made, you can choose to go through legal proceedings which have additional charges.
- We have a panel of solicitors who offer our clients preferential rates to deal with legal action.
4 – Issuing a Claim
- Legal proceedings begin with issuing a claim via the County Court Money Claims Centre. We offer our support in drafting and issuing a claim where additional fees will apply.
- Once issued the debtor has 14 days to reply.
5 – Requesting Judgment
- If there is no response or the claim is admitted, we are able to request a County Court Judgment which is registered against the debtor.
- Should Judgment be awarded, enforcement can occur to collect the outstanding monies. It will also show on the debtor’s credit file for 6 years.
6 – Enforcement Options for Commercial Debt
- Once a Judgment has been awarded, legal enforcement is granted to collect the outstanding balance owed by the debtor.
- If you would like to find out the enforcement options available to you, visit our Enforcement Options Blog Post.
If you require any further information, please do not hesitate to call us on 01702 466 300, or send us an email on enquiries@scottandmears.co.uk.
Published: 10th July 2023