Pursuing debt outside of court
Monday, 9 November 2015
If someone is refusing to pay the money that they owe you then there are a number of considerations that you need to think about when deciding what action to take. If you are a business and owed money by another company then you might have had a long relationship together and would prefer not to sever ties with them by taking them to court. Alternatively, you might just wish to avoid the extra cost and time involved in going to court.
How can an agreement be made out of court?
The first step to brokering an agreement with a debtor would be to make some type of informal contact with them to discuss the debt and find out the reasons for non-payment and if an agreement can be made for immediate repayment, repayment in instalments or some other kind of arrangement. If you want to maintain a relationship with the debtor then this step is critical, as if the first correspondence they have on the issue is through a solicitor rather than from you then it is likely to sour the relationship. However, as this is an informal approach you might find that the debtor does not act with the same kind of urgency as they would if a solicitor was involved in the negotiations. If this is the case then more formal action may be required.
Another way that the matter could be settled prior to court is through a statutory order, served by your solicitor. This will detail who owes the debt, what the debt is for, how much the debt is worth, any interest accrued, what previous steps have been taken to collect the debt and a date by which the debt is expected to be paid by.
The debtor then has a period of 21 days to make payment. After this your solicitor will be able to advise you on other methods of action to take which will likely involve the courts, such as county court judgements, attachment of earnings, bankruptcy and winding-up orders.
For more information on the recovery of debts, please see our full-length guide to debt collection. If you are worried about money that you are owed, then please contact our experienced legal advisors on 020 7611 4848 to arrange a complimentary telephone consultation.
Rollingsons Solicitors Ltd are a Central London law firm that focuses on building lasting relationships with clients by providing practical and effective legal solutions to problems faced by businesses, individuals and families.
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