When people talk about overdue invoices, late payment and debt recovery, you often talk of ‘escalating’ your response, or ‘taking it to the next level’ and so on.
In one sense, that’s an analogy – like the ‘high’ courts, we often think in terms of up and down about things that really have nothing to do with physical height.
But it’s a sensible way to view the process of escalation, particularly in the case of debt recovery, when there are several steps to take, each more serious than the one before.
Here are four steps to consider – they are by no means the only four, but they represent several of the biggest milestones along the route to repayment.
1. Final Demands
Sending a letter – as opposed to an email or an informal phone call – helps to cement what you are owed and make it clear that you will use other avenues as necessary until the debt is settled.
Make sure you spell out exactly what is owed, when it was due, and so on; it is also wise to send the letter by recorded delivery, so that you can prove not only that it arrived safely, but also when it was received.
2. Small Claims
In the UK we often talk about going to Small Claims Court, but actually these days it’s possible to recover some debts without having to go to court.
You can use the Money Claim Online service for some debts, although you’ll still have to pay a court fee in order to do so; there’s also the option of mediation to try and resolve the debt reasonably amicably.
3. Debt Collection Agency
A debt collection agency is the first step towards getting a third party to fight your corner, without (yet) having to go to court.
Some of the actions a debt recovery agency will take are things you might have already tried – persistent phone calls, letters and so on – but the threat of mounting fees added to the debt, and the knowledge that you’ve called in backup, can all help to prove to the debtor that you aren’t going away.
4. Court Action
Formal court action allows you to get a ruling demanding that your debtor pay what you are owed, either if the court rules in your favour, or if they simply don’t respond in their defence.
This court order can then be enforced, so if the debtor still doesn’t pay, you can go to the extreme of calling in the bailiffs to seize goods to the value of what you are owed.
If you would like to talk to a member of our team please don’t hesitate to call 0808 159 7692