Legal Action To Recover A Commercial Debt
If the debtor has failed to pay after we send a letter before action or a Statutory Demand, you can instruct us to issue court proceedings or Winding Up Proceedings.
We will help you to assess the chances of recovering the money owed to you and whether it is viable to proceed.
Should you wish to proceed, we will act quickly to issue a court claim on your behalf if so advised.
Issuing a Claim
This is relatively straightforward process but can often be more complex than the government’s website might lead you to believe for a number of reasons.
Our experienced team can help you to avoid delays and unnecessary extra costs. Using our specialist debt recovery team is not expensive. It can save you a significant amount of time, money and stress.
Service of A Court Claim
The court normally serves the claim form on the debtor, allowing two days for the debtor to receive it.
The debtor has 14 days either to:
- pay the debt
- admit the debt and offer payments
- enter into negotiations to settle the debt
- file a defence
- file an acknowledgment of service (that will allow it another 14 days in which to file a defence).
Interest and Compensation For Your Costs
The Late Payment of Commercial Debts (Interest) Act 1998 allows creditors to charge interest on debts in many circumstances.
The law may also enable us to recover compensation towards your costs involved in recovering an unpaid debt – that is unless an agreement or contract already provides adequate provisions for interest to be paid on late payments.
Alternatively, Section 69 of the County Courts Act 1984 allows interest to be added “as the court thinks fit or as may be prescribed” on some or all of the debt or damages.
Depending on how quickly your claim is resolved and the outcome, you can usually claim interest from:
- the date the debt fell due for payment (or the date the problem started) to the date that we issue a court claim
- the date we issue the court claim to the date of a judgment or court order.
Where the debt is over £5,000, you may also be entitled to interest from the date of a judgment or court order until the date you are paid.
Obtaining A County Court Judgment (CCJ)
Unless your claim is defended (or a counterclaim is filed), obtaining a County Court Judgment is normally quite straightforward and inexpensive.
If you have obtained a CCJ and the debtor still refuses to pay, there are various options available to try and force the debtor to pay the judgment debt.
Our team will normally have discussed these options with you at a much earlier stage.
There are various ways of enforcing a CCJ. They include:
- Third Party Debt Orders (previously known as Garnishees) – these allow you to freeze the money owed by the debtor in the debtor’s bank (or building society) account. They also allow you to freeze any sums the debtor is due to receive from a third party if that person or business owes them money.
- A Charging Order – this secures the debt against the debtor’s home or any other property they may own. Ultimately, they may be required to sell their home or property if they do not pay.
- An Attachment of Earnings Order – if a debt is owed by an individual, this allows the court to instruct the debtor’s employer to stop money from their wages to pay the debt.
- A Warrant of Control – this gives county court bailiffs the right to take control of the debtor’s possessions.
We may also advise you to make an application:
- seeking an order for the debtor to attend court and provide financial information
- for the enforced sale of a property (following a Final Charging Order).
Chasing An Unpaid Commercial Debt? Get Expert Legal Advice
Our debt recovery solicitors have years of experience in this specialist field. We handle claims from all over the country, from large companies to small businesses and large debts to small debts.
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