Litigation – debt recovery
Non-payment of invoices is a common problem for all businesses. In the current economic climate, credit control is becoming an increasingly important part of the daily operations of small and medium-sized businesses, and at SMR Solicitors we can assist with all aspects of debt recovery. We are able to offer our clients initial advice on the right course of action and to explain the various different options for debt recovery, including enforcement of court judgements in the UK, EU and worldwide. We can also assist clients in engaging tracing agents to locate their debtors, wherever they may be.
Is litigation worth pursuing?
If litigation is the only way to recover the debt, it is worth considering if the debtor is worth pursuing. Can a judgement against the debtor be effectively enforced to secure payment, especially if contact has been lost? This is something we discuss with our clients in the early stages to ascertain the best course of action for their business.
Enforcement – how do you get your money?
Following successful litigation, the judgement must be served on the debtor with a request that the monies are paid to your business. If the debtor fails to make payment, we can advise you on the most appropriate option available to you:
Third party debt orders
It is possible to apply for an order from the court that any third party who owes money to the debtor pays the amount of the judgement, or part of it, directly to you as judgement creditor. An application can also be made to compel the debtor’s bank to pay a sum to the creditor from a specified account held by the debtor.
This is an application to register a charge over the debtor’s property that acts like a mortgage on the property, save that no monthly payments are due. If the property is voluntarily sold, the charge will usually be settled at that time, depending on the way in which the property is registered by the debtor. If the amount is considerable, a creditor can apply for the property to be sold to realise the monies due under the charge.
To recover sums due under a County Court judgement, businesses must use either the County Court or High Court bailiffs. Bailiffs will generally be instructed to seize goods of the debtor, which can then be sold to pay both the debt and the costs of enforcement. There are certain goods that cannot be seized, such as the debtor’s tools of trade, but bailiffs can be a useful option if the debtor owns high-value goods.
Such proceedings should not be seen as a method of debt recovery, but the threat of them often results in the debtor making payment. They can be used before or after judgement if the amount owed is more than £750. The method depends on the circumstances of the debtor.
We are experienced at recovering money for our clients, and can adopt a firm stance or tread more carefully, depending on circumstances. We are committed to meeting each client’s needs quickly, efficiently and successfully, taking the debt problem off their hands so that they can get on with running their business.