How Do I Recover Debt from a Company?

If you have been unfortunate enough to encounter bad debtors in the past, then you will know that debt recovery is not without its challenges, especially when you are dealing with another company.  However, with the right approach, outstanding debts can be recovered quickly and amicably, without causing irreparable damage to a long-term relationship with a client.

 

The importance of a credit control policy

First and foremost, debt recovery should always start with a robust credit control policy.  If you have taken the necessary steps to protect your organisation before doing business with another company, then you should have drawn up and retained a signed agreement with your commercial client, clearly outlining your terms of business.  This contract is extremely important and will prove invaluable if you end up taking the client to court at a later date.

unpaid commercial debts

Unpaid commercial debts often arise as a result of poor credit control processes and/or a lack of financial resources, rather than being a deliberate act.  There are, however, some companies that are known as ‘serial late paying companies.’

If you have failed to discuss and agree the repayment terms with your client, or if your client does not have a person in post to monitor the company finances and settle outstanding debts in a timely manner, then you may encounter problems.

pre-legal chase letters

If a company you have entered into business with has not paid you on time, then a simple payment reminder email may be all that is needed to get things back on track.  However, if the debt still remains outstanding after sending one or more payment reminders, or if your phone calls appear to have fallen on deaf ears, then the next step is to send two chase letters, followed by a ‘Letter Before Action’. 

If you are thinking about taking the legal route to recover the outstanding debt from your commercial client, then you must be able to prove to the judge that you have made all reasonable attempts to recover the debt prior to referring the matter to the Court.

Remember, that a Business-to-Business Debts Interest & Compensation fee can be added to the debt under Section 5 of the Late Payment of Commercial Debt (Interest) Act 1998.

The legal process

Sometimes, unfortunately, despite making every effort to amicably recover a debt from a company, it may continue to go unpaid.  In such instances, you may decide that the time has come to take legal action. Whilst some debts can be recovered through the Small Claims Court, larger debts will need to be recovered through the County Court or, in exceptional cases, the High Court.

help is at hand

Whatever route you end up taking to recover a debt from a company, please remember that you don’t have to face it alone as the team here at Jackson CRS is only ever a phone call away.  We have extensive experience in all areas of commercial debt recovery and can work alongside you, or on your behalf, to quickly achieve the best possible outcome for you and your company.

Contact Us

If you would like to put your business in good stead for the future, then please give us a on call 01603 319034 or email: info@jacksonscrs.co.uk for a free no obligation chat about your needs and how we can help.