DEBT RECOVERY
Unpaid invoices can undermine your business, triggering cash flow problems long before the warning signs become obvious. Proactive businesses understand they have effective options to secure payment of outstanding debts. With the right legal guidance, we can protect your business interests and help you thrive in today’s competitive commercial landscape.
Secured Debt
Secured loans are backed by an asset which serves as collateral. If the borrower cannot repay, a creditor is able to take possession of the asset. Examples are mortgages, car loans and debt consolidation loans.
Unsecured Debt
Unsecured loans are not backed with an asset as collateral. This means it is difficult for a creditor to be repaid should a default occur. If you were to become insolvent, creditors would only get some, or in some cases, none of their money back. Examples are personal loans, trade invoices and payday loans.
Time Limits
In England and Wales, under the Limitation Act 1980, you generally have six years from the date a debt became due to take legal action to recover it. Once this period expires, the debt becomes statute-barred, meaning the debtor can raise a complete defence if a County Court claim is issued after the limitation period.
If that happens, the debtor can lawfully refuse to pay, and it would fall to you to prove that the six-year period has not yet expired. That said, if there has been any contact or acknowledgement of the debt within that time (such as a part-payment or written admission) you may still be able to pursue recovery. If you’re unsure whether the limitation period has passed, it’s advisable to check.
How we can help you get your money back
The options you have are limited, but we will able to handle the stress for you.
By Sending a Formal Letter
We will send a written demand (Letter Before Action) with our letterheaded paper outlining:
- The amount owed and the reason for the demand.
- The due date for repayment.
- Any interest claimed on the loaned funds.
- A firm deadline for repayment.
- A warning that legal action may follow
By Negotiating a Payment Plan
In many cases, a formal letter is all that is needed to begin dialogue.
When debtors are faced with the threat of costly legal action, they typically become open to discussions.
We will be able to assist with speaking to your debtor to enable a payment plan to take effect.
By Issuing a Statutory Demand
If the debt is £750+ (for companies) or £5,000+ (for individuals), we will issue a Statutory Demand.
If they don’t pay the debt within 21 days of the statutory demand, we can help you to apply for:
- Bankruptcy (for individuals)
- Winding-up Petition (for companies)
By Taking Formal Legal Action
If informal methods fail, we will assist you in one of two ways:
- Small Claims Court (For Debts Up to £10,000) Best for individuals & small businesses.
- County Court Action: Seeking a CCJ. (For larger Debts) Best for tradespeople and company debts.
FAQs
Debt recovery is the process of collecting overdue payments owed by individuals or businesses.
You should consider using a debt recovery service if you have overdue debts that are yet to be paid despite repeated requests. If there has been a breakdown in communication you may require professional assistance to recover the debt.
- Taking your instructions and sending a letter
We take your instructions, review your case and send a letter before action to the debtor requesting payment within a specified period of time.
2. Commence Court Proceedings
If you do not receive a satisfactory response from the debtor then the next stage is to issue legal proceedings through the County Court. The debtor will be sent the court form requiring them to pay the debt.
3. County Court Judgement
If no payment is received, a County Court Judgement can be obtained which is a Court Order that confirms the debtors have not paid the overdue amount which gives you the power to take enforcement action.
4. Enforcement
Once the County Court Judgement has been obtained the order can be enforced.
If you have unpaid debts that remain unsettled despite repeated attempts to collect, it may be time to consider a debt recovery service. When communication with the debtor has broken down or they’ve become unresponsive, professional help can effectively recover the money owed to you.
Gifford Cairns, and all debt collectors, must comply with the Consumer Credit Act 1974. This means we cannot harass or intimidate debtors in our communications with them. We also must provide accurate information about the debt. Debtors have the right to dispute the debt and request proof of the amount.
The length of the debt collection process depends on the specific circumstances and how the debtor responds. It usually starts with letters and phone calls, and if that doesn’t resolve things, legal action may follow. The process can take weeks or months, and in some cases, it may take years to recover the full amount.
Failing to use debt recovery solicitors carries several risks. You may end up unable to recover what’s owed, lose time and money chasing the debt, or damage commercial relationships through poorly handled attempts. There’s also a risk of falling foul of UK regulations if the process isn’t legally compliant. Debt collection solicitors bring the legal expertise needed to pursue debts efficiently, lawfully, and with the right level of pressure.
The Late Payment legislation allows businesses to claim statutory interest (currently 8% above the Bank of England base rate), fixed compensation, and reasonable recovery costs for overdue invoices. Our team will assess your situation to determine the full amount you are entitled to claim.