What do you do next?  You have chased your customer by letter and telephone to remind them the money is owed.  There is still no sign of payment. 

The odd non-payer or late payer may not seem a problem, but a few debts can turn into a significant sum which can be a strain on your cash flow.  Timely debt recovery services from solicitors can be extremely cost effective. 

The first step a solicitor takes is to write a letter before action.  This contains all the details of the debt; copy invoice, any details provided by the debtor as to why the invoice remains outstanding, and gives a final deadline for payment.  Such a letter states that unless the debt is paid by the appropriate time limit Court proceedings will be instigated.   

A high percentage of debtors will pay the debt when they receive a solicitor’s letter before action.  This is because they realise that unless they pay at this point, the amount they may have to ultimately pay could be substantially more.

The introduction of the Late Payment Commercial Debts (Interest) Act 1998 and Late Payment of Commercial Debt Regulations 2002 give you the right to claim interest and compensation if the debtor pays late.  The compensation ranges from £40.00 to £100.00 dependant upon the size of the debt, which would cover the solicitor’s letter.

If the debtor does not pay or respond on expiry of the time limit within the letter before action, Court proceedings are commenced and the costs of proceedings vary according to the size of the debt.

If the debtor does not respond to the claim form and accompanying documentation an application for Judgment in Default is made.  Subsequently, your solicitor will discuss with you the enforcement procedures available in detail.