PENDRAGON CREDIT CONTROL
PENDRAGON CREDIT CONTROL

Debt collection

Whilst debt collection is part of the service we offer, our main aim is to get your invoices paid to you on time so hopefully debt collection will not be necessary.

 

However, we have to accept that things can go 'pear shaped', especially in business.  Sometimes your client can be suffering short term cash flow issues themselves, or they could be purposely holding back your payment for their own gains or they could even be on the verge of bankruptcy.  Whatever the reason, there must be a process in place to help ensure that this 'overdue' invoice does not turn into 'bad debt' - i.e. money that you will never be able to collect and therefore have to write off which ultimately affects your profits and cash flow.

 

(In a recent survey, 34% of small businesses have recently been forced to write off bad debt.  And cash flow was the main contributor to insolvency in 41% of cases!)

 

So you've given your client every opportunity to pay up but no payment is forthcoming.  So what now?

 

   

Let's just clarify our position first:

 

We've followed the credit control plan and given reminders and chased payment.

 

We may have even given a grace period after the payment deadline and stated our intention to follow late payment legislation after this period.

 

Still no payment has been made so we've stated our intention to seek compensation, interest and costs under the late payment legislation as detailed on the invoice.

 

We've tried at all stages to resolve the payment issue but after all this there has still been no payment made.

 

We would now class this as an unpaid debt rather than just being 'late' and as such our debt collection process would start.  ( Don't panic at the sound of this as the first step described below is just a formal letter sent from our solicitors to your debtor and in the vast majority of cases this is all that is required to get your payment.) 

 

 

Step 1

 

This will involve getting our solicitors to send a Letter Before Action (LBA) or a Late Payment Demand (LPD).

 

The LBA is usually sent to consumers where the late payment legislation does not apply.  This formal letter usually gives your debtor a set time period (usually 7 days) in which to pay and warns of the imminent issue of a court claim together with additional interests and costs.   The LBA is an essential requirement before issuing any legal proceedings.

 

The LPD is similar to the LBA but is more suited to commercial debts as your oustanding invoice along with interest, compensation and costs that are being claimed are detailed in the demand.

 

The cost of sending these letters are included in your 99p fee!!

 

Usually, in the vast majority of cases (typically between 80-90%) payment will be made after the sending of the LPD or LBA.

 

If not, then it's onto Step 2.

 

Step 2

 

(At this point in the proceedings you can choose whether to deal directly with the solicitors or if you would like us to act as your 'intermediary' and deal with the solicitors on your behalf.  Some people, understandably too, find dealing with solicitors a daunting task and so we can take on this role for you.  Again, 

 

If the debtor has still failed to pay after the issue of a LBA or LPD then the next step is to take legal proceedings to recover your debt.  It is important to act quickly now as there may well underlying issues with your debtors circumstances and the longer you wait the more problematic it could be.  It is also important that we have given the debtor every opportunity to pay as described above because if it does eventually go to court, the court will want to see that we have acted fairly and responsibly in our actions. 

 

Our solicitors will not issue Court Action Proceedings without your explicit instructions which must be online or in the form of an email or letter.

 

As we have just mentioned, it is important to act quickly now because alarm bells will be ringing as to the financial capabilities of your debtor.  If you send your instructions before 4pm our solicitors can lodge the county court claim form on the same day.  Once the claim form is served to the debtor they have 14 days to:

 

- pay the debt, or

- enter into settlement negotiations, or

- opt to defend the action in court

 

Once proceedings are issued by the solicitor, we will act as your legal intermediary and liaise with the solicitor on your behalf.  We will be able to discuss and provide details of all of the credit control measures we have taken with regards to the invoice and will be able to take much of the workload associated with such dealings away from you.  Again for simplicity we charge a simple one-off flat fee (£95.00) for this regardless of whether it is a simple 'open and shut' case that is over in a week or if it is a protracted saga that takes the best part of 12 months to resolve.).  In successful claims such costs are usually recoverable from the debtors.

 

 

 

Step 3

 

If court action proceedings go ahead and either no defence is filed or the defence is struck out by a judge, and payment has still not been made, the next step will be for our solicitors to issue a County Court Judgement (CCJ).  Again, once instructions have been received, the CCJ can be processed on the same day.  The court will then instruct a local County Court Bailiff (for debts under £600) or a High Court Enforcement Officer (for debts over £600).  These will go to the debtors premises and obtain payment directly or take control of goods to the value of the outstanding debt.

 

At all stages of the Debt Collection process you will be kept fully informed of the processes and outcomes.

 

 

Contact us to request more information

 

Email:

info@pendragoncreditcontrol.co.uk

 

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