enquiries@jarmans-solicitors.co.uk 01795 472 291

Commercial Debt Recovery FAQ - Jarmans Solicitors

Commercial Debt Recovery FAQ

Making the decision to begin the debt recovery process can be difficult for any business, particularly if you have had a long relationship with the debtor.

Before you begin the process, it’s worth reading our frequently asked questions.

This is a how long is a piece of string question. You have to consider whether the time, energy, and money spent recovering the debt is justified by the amount you are owed. Sometimes, it could be financially reasonable to write off debts that are less than £100, however this could set a precedent for the future. We would always recommend finding out why you haven’t been paid, for example if your customer is unhappy with the goods they’ve received, you may not be able to recover any money until you have resolved that first. Jarmans always recommend seeking legal advice before beginning any kind of debt recovery process.

The first thing to remember is that you are running a business and that a client who doesn’t pay on time may not be as valuable as you think. The first step of the debt recovery process is to send a Letter Before Action (LBA) which sets out what is owed to you and gives a timescale to pay it in. However, it’s a good idea to discuss the situation with your debtor before you begin the debt recovery process to see if there is any way that you can reach an agreement.
If your customer has cashflow problems, it may be worthwhile negotiating some kind of compromise with part-payment and a rescheduling of the debt. This could help you to maintain your relationship whilst also ensuring you get paid. Also, if you do have to begin a legal claim, it shows that you have attempted to resolve the situation fairly.

After 30 days you are entitled under the Late Payment of Commercial Debts (Interest) Act 1998, to charge interest at the Bank of England base rate plus 8%. You can claim for debt recovery costs, which start at £40 per invoice. If your customer has cashflow problems, it may be worthwhile negotiating some kind of compromise with part-payment and a rescheduling of the debt. This could help you to maintain your relationship whilst also ensuring you get paid. Also, if you do have to begin a legal claim, it shows that you have attempted to resolve the situation fairly.

In a perfect world there would be a written agreement, purchase order and delivery note, however you essentially need proof that the customer requested your service or product and that you delivered it. Keep hold of all correspondence such as emails and texts as these could be used as evidence for any legal proceedings.

No matter the size of your debtor, from a small business to a big multinational, you should always try to follow the same steps and seek legal guidance.

Express terms are the terms that have been expressly stated by both parties in the drawing up or agreement of a contract. Implied terms are implied by the court and are based on usage or custom, previous dealings between the two parties, the intention of the parties, common law, and statute.

Need help?

If you would like to contact us or book a consultation with a member of our team please fill in the ‘Make an Enquiry’ form or call us on 01795 472 291 or email enquiries@jarmans-solicitors.co.uk

MAKE AN ENQUIRY

Contact Us

    TESTIMONIALS

    How We've Helped People

    • Execllent!!

    From the moment I instructed Jarmans Solicitors I felt confident this would be a quick and seemless purchase, unlike my previous Solicitors! Sonia Thrower in particular was amazing at keeping me updated throughout.

    Joanna

    • Execllent!!

    We have just successfully purchased our first home with the help from Sonia Thrower at Jarmans. We are very impressed with the service that we received, at first we were quite worried as the person that was given our case had left and Sonia took over at very early stages. With our purchase it was very different to normal as we also had land attached to our property where it started to get a little confusing with title numbers etc

    Jadi

    • Execllent!!

    Jarmans Solicitors are friendly, welcoming and very Professional. Great attention to detail, wouldn't hesitate to use them again. Thank you to Julia for all your help.

    Cloud22

    • Execllent!!

    “Good morning Kendra, I wish to thank you for acting so brilliantly on my behalf; your calm, knowledgeable, compassionate approach reassured me and gave me confidence with the decisions I made (as a result of your counsel) during a difficult and challenging time.  I have appreciated the regular phone calls and timely communications from you, it has been a privilege to work with you and I am happy with the outcome you have worked to achieve for me.  As you are aware, what happened

    GK

    Blog

    Discover Helpful Articles

    Separated Parents and Handling Contact Arrangements for

    Christmas is supposed to be a time of joy, happiness and

    5 Common Myths About Civil Litigation Debunked

    There are many misconceptions about civil litigation that can prevent individuals

    Everything You Need to Know About Civil

    Civil litigation is a legal process in which two or more

    Top 3 Mistakes to Avoid When Filing

    Filing a civil litigation claim can be a complex and intimidating

    Contact Us

    Get In Touch

    Why not arrange a chat with a team member to discuss your Personal or Commercial legal needs? Do not hesitate to contact Jarmans Solicitors on: 01795 472 291 alternatively fill in the form below and we'll get back to you asap.