Staffordshire Solicitors | Solicitors in Stafford and Rugeley - Hand Morgan and Owen - Debt Recovery : 10 Tips

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Stafford Office:
Tel. +44 (0)1785 211411
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Rugeley Office:
Tel. +44 (0)1889 583871
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DEBT RECOVERY : 10 TIPS

1.   From the outset make sure customers and clients are provided with a set of terms and conditions. This can set out payment terms and when things go wrong provide entitlements such as retaining ownership in goods and interest on unpaid accounts.

2.   Ensure that you have up to date contact details for customers. A County Court judgment is of little benefit if you do not know where the Defendant is.

3.   Invoice properly; don’t give a customer opportunity to procrastinate with an invoice that is incorrect

4.   Have a rigorous reminder system for accounts that remain outstanding. These do not need to be aggressive but sent as a matter of course. It is much easier to express concern about a relatively young debt if reminders have been sent (it also makes it much harder for the customer to argue that the account has been lost in the post)

5.   Consider interim accounts. A customer who struggles to pay these will have greater difficulties paying a single account on the conclusion of your contract. At the very least you will limit your losses on a bad customer.

6.   If unsure of the creditworthiness of customer consider the following ;

a)   A search of the Land Registry to see whether they own property and how many mortgages or loans are secured on that property.
b)   A search of the County Court Judgment register

Both searches can be undertaken relatively swiftly and cheaply online

7.   When dealing with individual consumers try to obtain employment details; an Attachment of Earnings Order can be a very effective way of recovering a judgment debt

8.   In a contract with a Limited Company consider asking for a director’s guarantee for your charges to protect against the risk of the Company being wound up.

9.   Refer matters to a solicitor promptly. We are frequently asked to chase to chase accounts that are six to twelve months old by which time the prospective defendant’s circumstances will undoubtedly have worsened with an increased risk of their insolvency.

10.   If you must use a Debt Recovery Agent, be careful who you use; the wrong agent can damage business reputations, relationships and expose you to the risk of counterclaims for harassment.

7 October 2009

Disclaimer

The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. The law may have changed since this article was published. Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.

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