If someone owes you money that’s well overdue, you’ll want to take action to try and recover it. That’s quite right — but it’s important to go about it in the right way. In particular, it’s crucial to understand why the debtor isn’t paying.
Two Types of Debtor
Broadly speaking, people (whether individuals or business owners) fail to pay their bills for one of two reasons. Either they choose not to pay, or they simply don’t have the money.
A “won’t pay” debtor is likely to carry on withholding the money as long as they can get away with it, and the sooner you begin an action against them the better. In the case of “can’t pay”, on the other hand, it may often be better to hold off taking action till they’ve recovered a bit.
This isn’t just kind-heartedness. If the debtor is in serious financial trouble, it might be impossible to get what you’re owed, either because they don’t have the funds at all or because what’s available has to be divided between a number of creditors. Even if you already have a County Court Judgement, you have six years to enforce it. It could sometimes be best to wait till you have the best chance of getting your money.
Information, Information, Information
So how do you know which category the debtor falls in into? Getting as much relevant information about their affairs is crucial, and this can be best done through a professional collection agency.
You’ll need to establish the debtor’s current address, as well as their current employer, if they have one, to help with enforcing any order. Most essentially, though, you need to find out their current financial background. This will establish whether they have assets that can be seized, and thus whether it’s worth pursuing the debt at present. Whether they’re a “can’t pay” or “won’t pay”.
What Happens Next?
If you do decide to make a claim, this starts with a letter to the person owing the money stating the facts and your expectations, giving them usually fourteen days to respond. If you receive no reply, you should give me a call.
This may lead to a court hearing, and if you win this, you’ll have a range of options for enforcing the judgement, such as applying for an attachment of earnings or instructing the bailiffs.
Whatever stage of this process you may be at, you’re very welcome to get in touch with me to talk over your options.
All collections are pursuant to the pre-action protocol for debt claims regulations where the regulations are to be applied.