{"id":4764,"date":"2016-09-30T05:34:16","date_gmt":"2016-09-30T05:34:16","guid":{"rendered":"https:\/\/simplylaw.waydevelopers.com\/england-wales\/wiki\/debt-collection-by-small-businesses\/"},"modified":"2023-09-12T16:29:01","modified_gmt":"2023-09-12T16:29:01","slug":"debt-collection-by-small-businesses","status":"publish","type":"articles","link":"https:\/\/simply.law\/england-wales\/articles\/debt-collection-by-small-businesses\/","title":{"rendered":"Skeletal Notes in relation to Debt Collection"},"content":{"rendered":"<p><strong><u>NOTES IN RELATION TO DEBT COLLECTION BY SMALL BUSINESSES<\/u><\/strong><\/p>\n<ol>\n<li><u>Matters to consider before providing credit <\/u><\/li>\n<\/ol>\n<ul>\n<li>Know your customer\/client.<\/li>\n<li>Ask for a copy of last accounts if material credit is requested. Alternatively, undertake a search at Companies House if the customer\/client is a company. In particular, ascertain if any accounts have ever been filed, or if the last <g class=\"gr_ gr_75 gr-alert gr_spell gr_run_anim ContextualSpelling\" id=\"75\" data-gr-id=\"75\">filed<\/g> account shows a negative balance sheet or only limited assets.<\/li>\n<li>Consider asking for personal guarantees in suitable cases. Much bad debt can be prevented through the use of basic credit control procedures.<\/li>\n<\/ul>\n<ol start=\"2\">\n<li><u><g class=\"gr_ gr_71 gr-alert gr_gramm gr_run_anim Punctuation multiReplace\" id=\"71\" data-gr-id=\"71\">First<\/g> step for debt collection<\/u><\/li>\n<\/ol>\n<ul>\n<li>Pre-Action Protocol Letter \u2013 this is part of a mandatory pre-action procedure, as set out in the Civil Procedure Rules. The letter must contain prescribed information and may take several hours to prepare in complicated cases.<\/li>\n<li>The letter will require a letter of response to be filed within a prescribed period.<\/li>\n<li>The letter should flash out any prospective defences. If no response is received, then it can only be presumed that there is no defence.<\/li>\n<\/ul>\n<ol start=\"3\">\n<li><u>Insolvency process for undisputed debts for over \u00a35,000<\/u><\/li>\n<\/ol>\n<ul>\n<li>First stage \u2013 process service of Statutory Demand. This needs to be personally served at the registered office of the company or to the relevant director(s) of the company. Statutory Demand requires debt to be paid or secured within 21 days;\u00a0otherwise, the respondent will face a winding up petition unless the whole amount is paid off by the next hearing.<\/li>\n<\/ul>\n<ol start=\"4\">\n<li><u><g class=\"gr_ gr_57 gr-alert gr_spell gr_disable_anim_appear ContextualSpelling ins-del multiReplace\" id=\"57\" data-gr-id=\"57\"><g class=\"gr_ gr_57 gr-alert gr_spell gr_run_anim ContextualSpelling ins-del multiReplace gr-progress\" id=\"57\" data-gr-id=\"57\">Winding up<\/g><\/g> petition <\/u><\/li>\n<\/ol>\n<ul>\n<li>If this application is successful, you will probably not be paid. You will line up with other unsecured creditors. Most businesses will come to payment arrangements to avoid going out of business.<\/li>\n<\/ul>\n<ol start=\"5\">\n<li><u>County Court debt collection proceedings<\/u><\/li>\n<\/ol>\n<ul>\n<li>For disputed debts or where insolvency process is not wished to be used.<\/li>\n<li>Availability of Summary Judgement application where no arguable defence.<\/li>\n<li><g class=\"gr_ gr_70 gr-alert gr_gramm gr_run_anim Grammar multiReplace\" id=\"70\" data-gr-id=\"70\">Ability<\/g> of Court on Summary Judgement hearing to order the defendant to pay money into Court as a condition of granting permission to the Defendant to defend the proceedings.<\/li>\n<li>No costs jurisdiction for small claims track where debt claim is \u00a310,000 or less. Only very limited debts can be recovered.<\/li>\n<li>Costs restrictions for claims in the fast track or between \u00a310,000 and \u00a325,000.<\/li>\n<\/ul>\n<ol start=\"6\">\n<li><span style=\"text-decoration: underline;\">Enforcement procedures of Court judgement<\/span><\/li>\n<\/ol>\n<ul>\n<li>County Court judgements may be registered at the High Court for enforcement purposes.<\/li>\n<li>High Court enforcement officers &#8211; very efficient in enforcing judgements against goods, including a\u00a0motor car of the\u00a0judgement debtor.<\/li>\n<\/ul>\n<ol start=\"7\">\n<li><span style=\"text-decoration: underline;\">Oral examination<\/span><\/li>\n<\/ol>\n<ol start=\"8\">\n<li><span style=\"text-decoration: underline;\">Charging order over property or shares<\/span><\/li>\n<\/ol>\n<ol start=\"9\">\n<li><span style=\"text-decoration: underline;\">Attachment of bank accounts or other monies owed to the judgement debtor<\/span><\/li>\n<\/ol>\n<p>These are bullet point\u2019s notes only. For further detailed advice, get in touch with an experienced lawyer by using <g class=\"gr_ gr_63 gr-alert gr_spell gr_run_anim ContextualSpelling ins-del multiReplace\" id=\"63\" data-gr-id=\"63\">Simply.Law<\/g>\u00a0today.\u00a0<\/p>\n<p>\u00a0<\/p>\n<p>\u00a0<\/p>\n<p>\u00a0<\/p>\n<p>\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Here&#8217;s a quick bullet point guide on what to expect in the debt collection process.<\/p>\n","protected":false},"author":63,"featured_media":7975,"parent":0,"menu_order":0,"comment_status":"open","ping_status":"open","template":"","format":"standard","meta":{"_acf_changed":false,"_joinchat":[],"footnotes":""},"categories":[12354],"tags":[9909,11038],"class_list":{"0":"post-4764","1":"articles","2":"type-articles","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-debt-recovery","8":"tag-debt-collection","9":"tag-small-businesses"},"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v23.4 (Yoast SEO v27.3) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Skeletal Notes in relation to Debt Collection - Simply Law England Wales<\/title>\n<meta name=\"description\" content=\"&quot;Explore our comprehensive collection of legal articles covering various topics to help you navigate the complexities of the law. 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