If you’ve always been put off pursuing a debt because of fears about the potential cost of debt collection, it’s time to think again.
That’s because, if the payment became overdue any time in the past six months or so, there’s a good chance you can add any reasonable debt collection costs to the amount you claim from the debtor.
Being able to do so is at the core of the EU Late Payment Directive, which was introduced on March 16th of this year.
For the most part, this simply cemented existing UK legislation – including a three-tiered system of fixed penalty charges that can be imposed on debtors, and the right to add statutory interest to the amount owed.
But possibly the most significant change was that the right to reclaim debt collection costs from the debtor is now also enshrined in law.
As a result, creditors (that’s you, if you’re owed money on an invoice or other payment) can now pursue debts for settlement, without being left out of pocket for the privilege of doing so.
Older debts are still worth pursuing too, as you can chase for payment on overdue invoices that are several years old.
When you do so, add statutory interest from the day the payment became overdue, and you could find the extra sum more than outweighs any costs involved in pursuing a claim.
If you’re in any doubt, contact CPA directly and we can help you to work out the costs that may be involved in your claim – but in many cases, since March 2013, you should find you can chase for payment without any direct costs at all.