- What do I do if someone owes me money?
- What do I do if the debtor ignores my 7 day letter?
- What happens if I cannot trace the debtor myself?
- What happens if the debtor company is in liquidation?
- What happens if the debtor makes me an offer to pay off the debt?
- What happens if the debtor gives me a payment that the bank says 'refer to drawer'?
- How can I demand my debt?
- What is the best way to enforce a money judgment?
First you need to ensure you have their current details, then you can send them a letter before action demanding the debt and stating what dates the debt is for and how much the debt is. The letter will state that the debtor has seven days to pay up or court proceedings will be issued.
You have to assess the situation.
- Do you have details of the debtor's financial situation?
- Are they working?
- Do they have any county court judgments?
- Can you mediate first?
You may then need to issue small claims proceedings or serve a bankruptcy or winding up demand. We will always try and negotiate with your debtor to avoid court proceedings where possible.
If you are unable to trace the debtor, you need to take a commercial view as to whether you wish to spend money with a tracing agent. The more information you have on the debtor, the easier it is to trace them. Once you have traced your debtor you can assess whether or not it is worthwhile to chase the debt.
This means that it is very unlikely that you will collect your monies. You will be listed as a creditor with the assigned liquidator, with other creditors who are owed monies. If the company has assets, they are sold to pay off creditors. Depending on how much money is owed to how many other creditors will determine whether it is worthwhile proceeding against a liquidated company.
You have to take a view, over how long a period it will take to pay off. Have they failed to keep with promises in the past?
Up to 2 years to pay off a debt, can be deemed reasonable by the court.
This means that the debtor does not have the funds to pay the monies from their bank. If you issue court proceedings, the debtor has no defence against this. If this happens it would indicate that the debtor does not have the funds to pay, so you might want to think twice before spending more money chasing this debt.
You have to go through the formal legal channels: a letter before action, court proceedings and then enforce a money judgment at court or insolvency. You cannot threaten your debtor or you can be prosecuted and this could hamper your litigation case.
You have to assess the debtor's circumstances,
- Do they have a job?
- Do they own a property?
- Will serving bankruptcy have an impact on their profession?
- Do you need to find more information on their circumstances?
- Do they have a bank account?
These are questions you need to ask when trying to decide what enforcement procedure you can take out at court. Debt-Recovery-UK can help you figure out the best solution for you once you have answered the relevant questions about your situation.