Debt Recovery

1. Is It Worth a Fight?

There are no hard and fast rules about whether to pursue a debt and which approach to take.

1.1 How much money are you owed?

• In terms of time and money, it may be best to write off very small sums, but the Small Claims Track (see 4) offers a cheap route without the need for solicitors.

1.2 Who is your customer?

• If it is a customer whose business you value, be diplomatic in your approach.
• If it is a one-off customer, you can be more assertive.

1.3 Why has the customer refused to pay?

• Is there any dispute over the goods?If so, resolve it immediately. Otherwise, the debt will be difficult to recover.
• Is the customer in cashflow difficulties?If so, try to negotiate a payment on account (part payment) and reschedule the remainder. Confirm this in writing.
• Are there already outstanding judgments against the customer?If so, the debt may well be irrecoverable. Ask your local court how to check the Register of County Court Judgments.
• Is the customer bankrupt or in liquidation?If so, the debt is probably irrecoverable.
• If the customer does not have a good reason for not paying, you may opt to pursue the debt. You can use a debt collection agency or a solicitor specialising in debt collection (see 2), serve a statutory demand (see 3) or go to court (see 4 and 5).