Rachael Allport, Litigation Solicitor with AMD Solicitors offers some tips to businesses.
The word ‘recession’ is one with which we have become all too familiar. Whether it be a downturn in business or an increase in spending, the UK’s recession has hit us all in one way or another.
As a result, businesses of all sizes are having increasing difficulty obtaining payment from their commercial clients for their goods or services. Having a debt recovery strategy takes on increased importance in these difficult times.
There are a number of possible ways to secure payment of business debts. Recent research suggests that the most effective solution in the first instance, is to try a ‘pre-action letter’ from a firm of solicitors requesting immediate payment of the debt. The letter affords the debtor one last chance to settle the debt prior to legal proceedings being issued. It is estimated that businesses who have instructed solicitors to do this receive immediate repayment from the debtor in over 80% of cases. A highly cost effective way of securing repayment!
If a debtor does not make immediate payment following a pre-action letter, there are a number of other debt recovery options. One option is to issue court proceedings against the debtor for the monies owed. However, taking court action can be time consuming and costly. A highly effective alternative course of action available to businesses is that of the statutory demand.
Statutory demands can be issued when the amount owing is greater than £750.00 and the debt is not in dispute. A statutory demand gives a company 21 days to settle the commercial debt, and, if after the 21 days has expired the debt remains outstanding, a winding up petition (the business equivalent of a bankruptcy order) may be presented to the company. In my experience, the mere threat of a winding up petition usually encourages prompt payment!
So, don’t let your business debts get on top of you. Seek professional help for your business to recover the money that you are owed in a cost effective manner, specifically tailored to your business's needs!
For advice on collecting your commercial debts or other commercial disputes contact Rachael on 0117 9738205 or email email@example.com.
Copyright AMD 2012