Commercial Debt Claim
Commercial Debt Claim
Good cash flow is essential for any business if it wants to survive and, in the current economic climate, it has never been more important.
Occasionally, there is a genuine reason for non-payment of a debt. In most cases, however, there is not. Whatever the situation, it is important to understand why the debt has not been paid and, if there is no valid reason, to act quickly to recover the debt.
There are a number of effective methods of recovering debts but choosing which one to use depends on the circumstances of the case and the size of the debt involved.
If you have been unsuccessful in pursuing payment for goods and services through the normal channels, then you may be advised to enlist the services of a legal debt specialist. They will be able to take on the chasing of the debt through a set process of pre-action letters and telephone calls, which will set out the details of the debt and the potential penalties for non-settlement. For example, if the debtor is a limited company, the debt exceeds £750.00 and it is not disputed, the letter can threaten winding up proceedings, rather than threatening to sue in the High Court or County Court.
An experienced solicitor will also be able to advise on the merits of issuing court proceedings if the debt is not settled. The onus has to be on cost-effective debt recovery – if the costs and the risk of litigation outweigh the potential benefit, then the commercially-sensible advice would be to write off the debt. If the matter does go to court, then your solicitor will prepare your case while also looking at the possibilities of settlement throughout. You should also seek legal advice in the aftermath of a judgment in your favour, as there are various options for enforcement.
In certain circumstances, your solicitor may recommend winding up or bankruptcy proceedings as the most appropriate method of debt recovery. While the chances of early repayment may be increased, the costs are also higher.
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