Debt Recovery
Good credit control can avoid the need to take debt recovery action. However, where a debt arises and remains unpaid, swift and effective measures need to be taken to maximise chances of a recovery.
At KBL we have a dedicated debt recovery department, supported by solicitors with years of experience in debt recovery. To find out the costs involved to recover your debt please see our debt recovery calculator. We deal with debt recovery in a professional and proportionate manner:
- We do not send out automatically generated letters. Each case is individual and the way forward is determined on the issues and parties involved.
- We deal with debt matters from start to finish, unlike many bulk debt recovery solicitors who are unable to proceed with recovery once the matter becomes disputed or complicated.
- We have great expertise in enforcement of judgment debts, including issuing insolvency proceedings, instructing a bailiff/sheriff, implementing charging orders, attachment of earnings and third party debt orders.
You can increase the possibility of recovery by obtaining personal guarantees where appropriate. Please contact our corporate team if you are interested in introducing personal guarantees.
KBL's Debt Recovery Service
What is Debt Recovery? Debt Recovery is an efficient cost effective litigation procedure (See our Debt Recovery Calculator) used to recover debts which are outstanding to our clients from their customers. It is to be utilised where no payment has been made with respect to the services and/or product provided by our client to their customers and delay is adversely affecting our client's business.
Why should you use it? Not having an effective system of Debt Collection and credit control generally can adversely affect the profitability of a business, and in serious cases of default, ultimately undermine that business resulting in its untimely failure.
How can we help? We can recover debts quickly and in the majority of instances have our fees incurred in pursuing the debt paid by your customer. Clearly, where a debtor goes into insolvent liquidation and no security has been provided to the client as a creditor, then it will not be possible to get paid. However, our experienced team will not only be able to advise which debts are worth pursuing but can also make use of all available Court procedures to ensure prompt payment of any sums outstanding together with a Court Order for the fees incurred in instituting those proceedings are also paid.
Why should you act NOW? In my experience clients invariably have important "commercial relationships" with the businesses they are thinking of pursuing and they are reluctant to pursue that debtor through the Courts for fear that the Court proceedings will undermine that relationship indefinitely and will ultimately affect the existing business relationship.
Of course, we understand the importance of commercial relationships; however the importance of a commercial relationship always needs to be weighed against the affect of not receiving payment in respect of a particular invoice.
If you are prepared to forego payment in its entirety in the interests of preserving and maintaining commercial relationships generally, then the debt should not be pursued. In my experience though, successful debt recovery is all about "first come, first served". I find that a delay in instituting legal proceedings can invariably result in failure to recover at all. This is principally because there is a time factor associated with litigating a debt through the Courts. Whilst this process is ongoing, debtors invariably seek advice from Insolvency Practitioners, Accountants or other legal advisers and enter into one of the various methods of insolvency arrangements currently available such as a:
- Creditors Voluntary Arrangement
- Administration (increasingly popular)
- Insolvent Liquidation.
The entering into of any of those types of arrangement generally has the effect of prohibiting the creditor from pursuing the debtor any further. In short a creditor is effectively frozen out from proceeding any further and merely ranks as an unsecured creditor should the debtor company go into Insolvent Liquidation. It may be a further 12 months therefore before the debtor receives payment and the amount he receives is usually a small percentage of the amount he was originally owed.
Delay in issuing proceedings often means that the legal costs which have been incurred from the issuing of proceedings until the creditor company goes into some form of Insolvent Liquidation arrangement, are also unrecoverable from the debtor and means the creditor still has a liability to the solicitors for the fees incurred. I would describe this as an unfortunate "double whammy". The client here not only suffers the indignity of not recovering a legitimate debt which has been outstanding for a period of time, but also ends up having a liability to the solicitor for pursuing the debt.
Careful consideration therefore needs to be given to pursuing debtors and once it is resolved to pursue that debt it needs to be actioned quickly.
What to do now? Clients who are seriously interested in pursuing debts should contact our Debt Recovery team or complete our Debt Recovery instruction sheet and return it to our offices together with the relevant attached documentation referred to therein and a signature.
They should then read and subject to agreeing the terms contained in our Client Care and Costs Information letter and Terms and Conditions of Business generally, sign and return those to our offices along with ID in the form of a passport and 2 utility bills in respect of persons who are not currently existing clients (for more information on ID please see our Money Laundering Regulations Factsheet).
Upon satisfactory completion of the above, we should be able to despatch the "Letter before Action" to the debtor company concerned.
