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5 Steps to Recover Your Commercial Debt


Debt can cause a huge strain to any business so it is important to understand how it can be recovered. The recovery process is never easy and, if taken right to the end, can be very time consuming. Below is a guide to the process you can expect to take when recovering your debt:

Step 1: Chase your debtor

Legal action is and should be the last resort. As such, before you even think about legal proceeding make sure you have chased your debtor on numerous occasions. This will also be beneficial for you when if the dispute does end in court as the judge will be able to see the debtor was aware of the debt and you gave opportunities for payment to be made. Chase your debtor in a manner that can be evidenced. Consider emails, phone calls with detailed telephone notes, letters, conversations witnessed by a third party. 

Step 2: Letter before action

A letter before action is a formal letter sent to the debtor informing them of the debt and of your intention to begin legal proceedings if the debt has not been payed. You can write this letter yourself or you can instruct a solicitor to do it for you. The letter should include why you believe they owe you the debt, a statement of the amount and calculations of how you reached that amount. The letter will also give the debtor a reasonable time period to respond or pay the debt. Many cases are usually settled at this point.

Step 3: Legal proceedings

If you do not receive a satisfactory response to your letter, the next step is to initiate court proceedings. For claims under £10,000 you will be sent to the small claims court which is a relatively simpler process. For larger claims you need to go through the County Court proceedings to recover your debt. If you have not done so already, it is advisable at this stage to instruct a solicitor with expertise in debt collection.

Stage 4: County Court Judgement (CCJ)

If the court agrees with your claim a CCJ will be issued ordering the debtor to pay the legal costs. The CCJ will be issued immediately after the expiry of the County Court Claim. The CCJ then allows debt recovery proceedings to begin. It is also recorded against the debtor’s credit record and will affect their credit score and ability to obtain a loan or mortgage in the future.

Stage 5: Enforcement of CCJ

Now that the court has formally issued the CCJ against the debtor, you can begin the collection and enforcement process. You can start the enforcement processes immediately upon receipt of the CCJ. The most common methods are instructing a bailiff or applying the to High Court for the High Court Enforcement Officers to enforce the debt. The enforcement agent will be instructed to collect the debt or seize goods from the debtor. 

For more information visit our commercial debt recovery page. Alternatively, call our Commercial Debt Recovery Solicitors on 0330 127 8888 for a free 30-minute consultation on your matter.


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