Debt Recovery – The Steps
Bad debt is a problem suffered by most businesses. A bad debt is where the business is owed money for services or goods rendered.
So how do you tackle outstanding debts?
There are of course many ways to recover monies but one course of action that is often successful is as follows:
1) Firstly you should send a polite yet firm e-mail/letter stating that a balance is overdue and that you want payment within 21 days.
2) If this does not achieve the desired result you could instruct a solicitor to send a ‘Letter of Claim’. This sets out that a contract was made and performed to a satisfactory standard and that the agreed fee was not paid for. This can also be referred to as a letter before action.
3) If this does not work then one final letter should be sent with more severe threats of legal action. This is effective as it may achieve a result and if not it looks good in front of the Judge and shows that you have exhausted all attempts at settling this matter.
4) If this still does not work then the two options are:
a) Do nothing and write off the debt or
b) File a county court claim.
Any action in the county court should be considered and various factors should be assessed before you decide to issue proceedings. These include a) chances of success b) amount owed c) court fees.