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How to recover debts owed to your business

Abacus Solicitors outlines the steps your firm can take to retrieve monies

21 April 2017

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Many businesses often suffer at the hands of customers and clients who don’t pay on time. Although it can be incredibly frustrating, you are definitely not alone. Knowing how to act in the right way means you can boost your chances of recovering your debts before the situation escalates and legal action is required. North West debt recovery firm, Abacus Solicitors has produced this useful infographic on how you can recover the money owed to you.

Mentally prepare

Later paying customers will come up with all kinds of excuses to avoid payment; the important thing is you remain calm and stay committed in your pursuit.

With the wrong mental approach clients will continue to commit a breach of etiquette. If chasing clients or negotiating isn’t your thing, then you will need delegate this duty to someone in the company who is. Make sure it is something that is part of their job and not a second thought.

What does the solicitors letter consist of?

If many of these steps on the infographic haven’t been successful and the client has not budged, you can have your solicitor write a letter. This formal letter will threaten legal action if this debt remains unpaid. Customers who ignore your letters and phone calls will be more concerned with a letter from a solicitor, particularly when it threatens legal action against them or their business.

A letter from a solicitor is usually enough to prompt some form of communication from your customer, perhaps even a swift payment. Using a solicitor will also help you define what your next steps are and what further action is required should it be necessary.

What happens if it goes to court?

One of the steps a solicitor may suggest is to issue a court proceeding, and they will tell you what type is best suited to your claim. Although it’s often a last resort, this is always an option if the sum can’t be settled via alternative methods.

If your claim against them is not disputed, you will be able to obtain a quick judgment as to how you can have this enforced, for example charging orders or county court bailiffs. A solicitor will tell you which is the most worthwhile pursuit.

However, if your claim is disputed, it will go through procedural steps to a court hearing where a judge will determine the outcome. You will need a solicitor if your claim is for a large sum of money and is likely to be disputed.

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Finance