- The due date passes without payment
- Internal credit control procedures continue for another 30 days (with fruitless letters and phone calls to the debtor)
- You instruct a solicitor (or possibly a debt collection agency)
- They send a 14 day ‘letter before action’ to the debtor, but still no payment is made.
- County Court proceedings are then issued, and assuming all goes well a judgment is received around 14 days after being requested (sometimes longer)
- When the judgment arrives back from County Court you transfer it to the High Court Enforcement Officer (HCEO) who sends another 14 day notice to the debtor.
- If the debt remains unpaid then the HCEO attends the debtor’s offices and tries to enforce payment or seize goods to the value of the debt (as seen on TV). If goods are seized then these are taken to auction before any monies are allocated back to you.
- In the worst case scenario you still may not have received any of your £10,000 debt more than 3 months after it was due. And what if your business has several bad debts and this process is followed time after time. Occasionally HCEO’s recover payment but what are the alternatives?
A Better Way to Get Debtors to Pay…
The usual process for debt claims against corporate debtors (Limited Companies and Limited Liability Partnerships) which exceed £750 is complex and time-consuming. For example, let’s consider a situation where you are owed £10,000 by a Limited Company.