Alternative Dispute Resolution for the Collection of Debt

Category: Debt Collectors, Debt Collection Service

Alternative Dispute Resolution, or ADR, is a range of techniques that might be used for the collection of debt.  It is intended to help parties in dispute reach a settlement, negotiating between the affected parties without the use of an arbitrator or a judge.  ADR recognises that in some instances negotiations can reach a deadlock situation, often because the nature of litigation is such that opposing parties are encouraged to adopt widely opposing positions.  However, it is not intended to be an alternative to traditional negotiation.  ADR's aim is to promote solutions to disputes in a more imaginative way than traditional negotiation techniques, if this traditional negotiation alone does not lead to a settlement.

It is up to the parties involved how they wish to proceed with ADR.  Some of the most common methods are: mediation, where the parties meet with a trained mediator who will try to develop common ground and test out ways to resolve the dispute until an settlement is achieved; expert opinion, where an expert is appointed to consider areas of particular dispute, particularly those of a technical nature; adjudication, where the outcome of the dispute is determined by an adjudicator; and mini trial, which is similar to...Read More

Business Debt Collection, Debt Collectors

Category: Debt Collectors, Debt Collection Service

If you are running a business and need help with your business debt collection, then consider the options open to you. Business debt collection can be carried out by your own company, or by contracting a debt recovery solicitor or other debt collection agency.

It is worth weighing up the pros and cons of how to proceed with your business debt collection. If you try to do it yourself, do you have the time and resources in-house to carry out it out successfully? Will you have to take time to trace a business that may have moved without leaving a forwarding address? What if the business has gone into administration or is insolvent? Do you know the legal ins and outs of debt recovery and the guidance laid down by the Office of Fair Trading?

Pursuing bad debtors is a time-consuming business and should not be undertaken lightly. This is where the knowledge and experience of UK debt collectors comes in. Debt recovery solicitors know exactly what needs to be done in any given situation, and will have experience of many different scenarios where business debt collection has been necessary.

A debt recovery solicitor will discuss all the relevant issues with you, arrange a fee for debt tracing and commercial debt recovery, and will usually agree ...Read More

Debt Collection Act

Category: Debt Collectors, Debt Collection Service

The law in the United Kingdom is rather behind many other countries in terms of debt collection legislation in that, as yet, it does not have a specific debt collection act pertaining to debt recovery.

However, the Office of Fair Trading (OFT) has a publication called “Debt Collection Guidance” which was originally published in July 2003 and updated in 2006. In 2011 the OFT, following a period of consultation, again updated this publication.

The original guidance was issued because the OFT, under the Consumer Credit Act 1994, has a duty to make sure that licences for debt collection are only given to those people or organisations who are deemed fit to hold them. This also applies to the retention of those licences.

The updated guidance, though not in itself a debt collection act enshrined in UK law, sets out the standards that are expected of any business involved in recovering consumer credit debts. These businesses include traditional debt collectors, tracing agents, solicitors ...Read More

Debt Collection Guidance

Category: Debt Collectors, Debt Collection Service

The Office of Fair Trading (OFT) in the UK provides debt collection guidance to anyone who is involved in debt recovery. The debt collection guidance applies to anyone or any business seeking debt recovery, and covers what the OFT considers to be unfair practices in dealing with debt collections. It should be remembered that debt collection guidance is not just for specialist debt recovery businesses, such as debt collection solicitors, banks or traditional debt collectors. The advice also applies to creditors whose credit control departments pursue outstanding client debts.

If the OFT receives a complaint from a debtor about the approach of a debt collector, and it is upheld, the debt collector risks losing their licence to operate a debt collection service.

There are a number of practices that the Office of Fair Trading considers to be unfair:

Debt Collection Visits

Visiting a debtor's place of work is considered unfair, unless it is in relation to a business debt. A visit to a debtor's home is permitted under certain ...Read More

Debt Collection Letter

Category: Debt Collectors, Debt Collection Service

A debt collection letter, or debt recovery letter, is an essential tool to be used during the process of debt recovery and fair debt collection. The initial stage of recovering, for example, a small business debt if there has been no response to an invoice and invoice reminder, is to write to the person or business that owes the debt. This is known as a debt reminder letter or late payment letter. If you have a debt recovery solicitor, they will be able to give you a simple template for you to do this yourself, if you wish.

The letter should be polite, in order to help you retain a good working relationship with your client. It will often get results and avoid the need for further action. If this initial debt reminder letter is ignored, prepare and send a late payment letter to reinforce your initial payment reminder. Again, keep it polite and, if necessary, ask your solicitor's advice.

If this letter is also ignored, a debt collection letter can be sent. This acts as a final demand to the debtor, and is usually the last act before legal proceedings are initiated. However, your debt recovery solicitor may suggest trying a course of action such as negotiation before going down the ...Read More

Debt Collection Strategies - UK Debt Collectors

Category: Debt Collectors, Debt Collection Service

Third party debt collection services have various successful strategies that they use for recovering money that is owed to their clients.  If other options have been exhausted for the collection of overdue funds, it could be time to employ the services of a professional agency.  The tactics used to recover the money might be as follows.

Mail

A debt recovery service will typically send out a series of demand letters.  A demand letter includes the name and address of the debtor, the details of the creditor, the total amount outstanding and the details of the collection agency and agent.  The first letter is likely to be a courteous reminder although the language used is designed to encourage the debtor to pay.

Sometimes the initial letter is enough to prompt payment.  A letter from a third party could raise fears of a damaged credit rating or payment might be made immediately simply because of the psychological impact of contact from...Read More

Debt Tracing, London Debt Collectors

Category: Debt Collectors, Debt Collection Service

Debt tracing is the first step for an individual or a business to take, to try to recover money owed. Collecting a debt means it is essential to find the person or business that owes the money. Although this may sometimes prove difficult, especially if someone has moved house, the development of the internet has made accessing information for debt tracing easier than it used to be.

The most important thing to remember when you want to find UK debtors, is to provide as much information as you can to your debt collecting solicitor. Debt tracing can be made harder if the debtor has a history of bad debts. Your debt recovery solicitor will be highly experienced at tracking down elusive bad debtors, and will use a variety of techniques to ensure they are found as quickly as possible.

Essential Information for debt tracing, are addresses and telephone numbers. Even if the debtor has left a last known address, and the telephone is not in use any more, they are an important starting point for your tracing agent to build up a picture of the bad payer. If you are able to provide the details of a former employer, or you have other useful insights, especially if you have had a business relationship with the person, make sure these ...Read More

Find UK Debtors

Category: Debt Collectors, Debt Collection Service

When a sole trader or limited company asks a debt recovery solicitor for assistance in finding UK debtors, they should be aware of the difference between the two forms of business. Your debt recovery solicitors will help you with this information.

The main difference relating to the collection of bad debt, is that a sole trader is solely liable for the debts the business runs up, and so can be traced and pursued for any of that debt. A limited company, as is suggested by its name, limits the liability of shareholders so that they will not have to pay more towards any debts than they have already paid to be shareholders, or have agreed to pay to be shareholders. In this case, the liability for debt lies with the company itself.

Finding UK debtors, when looking to trace a company debt, may initially appear to be straightforward. Legally, limited companies are obliged to register with the central database at Companies House and file an annual return, together with their accounts. The database holds details of company directors and contact details. However, there is nothing to prevent directors of a company that has debts that cannot be paid, winding the company up and starting another one. In this way, they can leave the debts of the previous company behind. However, if there were to be ...Read More

Finding a UK Debtor

Category: Debt Collectors, Debt Collection Service

When deciding whether or not to instruct a debt recovery solicitor to assist with finding a UK debtor, it is worth considering how much you feel you can do on your own. You may be able to find a debtor through the details held on the Companies House database, or you may have, or be able to get, an address or telephone number yourself. However, that does not mean that you will be able to recover the debt. Even if you find the debtor, they may continue to refuse to pay.

Your solicitor will be experienced at finding a UK debtor. There are, unfortunately, a number of individuals and companies in the UK who have no intention of paying their debts, and who are very experienced at dropping off the radar. Databases used by professional agents to trace bad debts are now extremely advanced, and a tracing agent will save you a lot of time and effort, as well as significantly increasing the chances of getting your debtor to pay you. One bonus is that if your tracing agent is unable to trace the debtor most companies will not charge you ...Read More

Guide to the Collection of Debt

Category: Debt Collectors, Debt Collection Service

When faced with outstanding debts there are many things to consider, such as how far to pursue the debt and how to do so without alienating a previously reliable client.

Before taking further action to pursue a debt, it is wise to weigh up the prospect of recovering the money owed against the time and expense that will be involved in the pursuit.  Small debts, say of less than £100, might be better written off if there is an expectation that a reasonable amount of work will be involved as opposed to a couple of telephone calls.  However, it is important to also consider whether ignoring one debt will set a precedent for other small debtors in the future.

If the debt is larger, steps should be taken to determine why payment has not been made.  There could be a dispute that needs to be resolved or the customer might have cash flow difficulties.  If so, a partial payment or instalments could be negotiated.  Negotiation is often a good way forward in circumstances where the customer is unable to pay.  It can avoid the expense of further action and maintain a good relationship with the client to ensure future business if their monetary problems are temporary in nature.

If there are CCJs outstanding against the client already, recovering money from ...Read More

How to be Compliant in Debt Collection

Category: Debt Collectors, Debt Collection Service

When faced with a situation where money is owed, it is important to make sure the correct procedures are followed by any debt collection agency trying to reclaim the amounts outstanding.

Debt collection agencies are bound by a code of practice set out by the Credit Services Association.  In order to be compliant when dealing with a person who owes money to a client, the key areas of consideration are as follows. 

Data Protection

This is one of the most important areas of consideration.  For example, a debt collection agency must not leave messages with a neighbour or discuss the matter with someone else who answers the telephone on behalf of the debtor.  The details of the matter can only be discussed with the parties directly involved.

Treating Customers Fairly

A debt collection agency must make sure all of its ...Read More

Legal Routes of Debt Recovery

Category: Debt Collectors, Debt Collection Service

There are different legal routes of debt recovery depending on the amount of money that needs to be recovered.  The courts involved are either the County Court or the High Court.

Most claims are issued in the County Court and this is where a claim should first be made.  County courts deal with a range of different claims, which includes debt recovery.  If the claim is larger and more complicated, it will in most circumstances be heard in the High Court.

Within the system of County Courts, there are three tracks of case management.  These are the small claims track, the multi-track and the fast track.  A claim first needs to be made to the County Court and defended.  It will then be allocated to one of the tracks, depending on the value of the claim.  If the claim is more than the small claims limit of £5,000, it might be prudent to use the services of a solicitor.

The small claims track limit of £5,000 involves claims such as goods not supplied, faulty goods and outstanding debt.  The fast track deals with cases involving sums between £5,000 and £20,000 and ...Read More

No Collect no Fee, Debt Collectors Service

Category: Debt Collectors, Debt Collection Service

One of the main concerns for any business seeking UK debt recovery is what the potential costs are, and so if you decide to use a debt collection agency you should explore their provisions for a no collect no fee agreement. You will need to weigh up the costs to your business if you decide to proceed, remembering that recovering bad debt can be both a time-consuming and onerous process. You also need to consider the relationship your business has with the client or other party, if you are going to pursue bad debtors.

By choosing to hand the process over to a good debt recovery solicitor, who is highly experienced at chasing down bad payers, you will get an efficient, transparent service from experts. It is likely to cost your business less in the long run, than if you had devoted your own resources to the debt recovery operation.

UK debt collectors will consider all debt recovery jobs under a no collect no fee basis. No collect no fee debt collection should be discussed and negotiated with your chosen UK debt collection agent at the outset. At its basic level, no collect no fee is exactly what it says. If the debt collector is unable to collect the debt then you will not have to pay anything, provided this has been agreed prior to entering into ...Read More

No Win no Fee Debt Collection, Debt Collectors London

Category: Debt Collectors, Debt Collection Service

Dealing with debtors can be a lengthy and stressful business. This is just one good reason to consider using a professional debt recovery solicitor who specialises in dealing with slow paying clients and clients who do not pay their debts, and who offers a no win, no fee debt collection service. Debt collection solicitors have a range of services that they offer to businesses that need to trace debtors and recover money owed. You should always discuss the options carefully with your debt collection solicitor before making a decision, as there are often several solutions available to recover bad debts.

Debt collection agencies aim to collect UK debt fairly and transparently, keeping the client in touch with all developments as they proceed. One service that will be offered is no win, no fee debt collection, and the way in which this will work will depend on the type of debt to be recovered. In many cases the offer of no win, no fee debt collection is relatively uncomplicated. Debt collectors will work on many options for debt recovery before considering the final sanction of taking a debtor to court. If legal proceedings do occur, then they are very likely to have costs attached, though again it is worth discussing payment options with your debt collection solicitor.

When there is a downturn in the economy, and if consumer debt ...Read More

Non Payers and Late Payers

Category: Debt Collectors, Debt Collection Service

The business world is full of companies who have gone under because non payers and late payers of bills have not been pursued effectively. Most business people recognise that late payers can often be having genuine problems, and will work with them to address the issues. Sometimes writing simple debt recovery letters can do the trick, and good working relationships can be maintained to mutual benefit.

Non payers can be more difficult to deal with, especially if they have “done a runner” leaving no forwarding address. This is when the services of debt collection solicitors may come into play, tracking down and recovering bad debt. When you have worked extremely hard to build up your business, the very last thing you want is for non payers and late payers to threaten your cash flow, and perhaps even jeopardise the business itself. Debt recovery solicitors can take the burden of chasing up bad debtors from your business, using their legal knowledge and understanding of guidelines issued by the Office of Fair Trading to resolve the situation to your benefit.

Debt collection is not just about rushing to court, but rather thinking through the problem carefully with advice from your debt recovery solicitor, to map out the best ...Read More

Recovery of Debt From Another Member of the EU

Category: Debt Collectors, Debt Collection Service

There are various ways to facilitate the recovery of debt from a person or business who is based in another European Union (EU) country.  When the two parties involved are from different EU member states, this is referred to as a cross-border claim.  The following methods of reclaiming debt are used voluntarily in place of traditional avenues, although legal advice might be advisable in case of an appeal.

European Order for Payment (EOP) Procedure

This process was introduced in December 2008 to provide a quicker and easier way for creditors to recover outstanding funds that are not disputed in a cross-border claim.  The procedure operates under a uniform process across all member states of the EU and uses standard forms.  It can be used in matters involving both commercial and civil claims, and there is no need to involve lawyers in the process.  When an order is obtained using the EOP process, it is not necessary to immediately take steps to enforce the decision in another part ...Read More

Tracing a Debtor, Debt Collectors Service

Category: Debt Collectors, Debt Collection Service

Using a professional tracing agency, recommended by a debt recovery solicitor for the purposes of tracing a debtor to recover business debts, will give you confidence that the problems you are having with bounced cheques or bad payers are likely to be resolved quickly and effectively.

Debt tracing can be a time consuming business, and if you are running your own small business you know that time is money. Contracting specialist debt collectors makes sense because they have the tools and experience in tracing debts to provide an accurate and efficient service.

Debtors are not all the same, with some people genuinely getting into trouble perhaps because of the economic situation in their business sector, or because other people have failed to pay them. It is unlikely that they will need to be traced, especially if there has been a good relationship up to that point, and lines of communication have been maintained. Indeed, you both may wish to maintain the working relationship even though there is an outstanding debt.

Tracing debtors becomes necessary when it is clear they have no intention of honouring their debt, and they...Read More

When to Turn to the Courts for Debt Recovery

Category: Debt Collectors, Debt Collection Service

Although it might seem like a good option to take a claim for debt recovery through the courts, careful consideration must be given to whether this is the right course of action to take.  Some points to bear in mind are as follows.

How Much Will it Cost in Relation to how Much is Owed?

The costs of taking court action could be considerable, particularly if larger amounts are owed.  Alternative methods of debt recovery could produce the same outcome but over a shorter period of time and for less expense.  Costs could be awarded if the outcome is successful, although courts have been known to withhold an award for costs, if alternative dispute resolution methods have not been attempted first.

Is all the Necessary Information Available?

Gathering information about the debtor should be a priority.  Information such as who they are, what they do, what assets the debtor has that can be pursued, if guarantors are involved and whether there are any CCJ's against the debtor.  If the debtor is in business, it is worth investigating if they still ...Read More

When to Use Debt Recovery Solicitors

Category: Debt Collectors, Debt Collection Service

Debt recovery solicitors provide a type of service that can be used in circumstances where money is owed to a creditor.  With their legal knowledge and experience, debt recovery solicitors are able to offer advice and assistance on the full range of options available to recover the outstanding funds, including court proceedings, if this course of action should become necessary.

As an alternative to debt recovery solicitors, a debt collection agency could be used.  However, the services of a debt collection agency might be limited to claiming outstanding payments and they might not be in a position to continue with the process if there is a dispute about the amount owed or level of repayment.

Using a debt recovery service can be helpful simply to show a debtor that the matter is being taken seriously.  A letter from a firm of solicitors or a debt collection agency gives a clear message that the matter is likely to be pursued if the outstanding amount is not received. 

If the amount owed is small and the circumstances are straightforward, it might not be worthwhile involving solicitors, particularly if the cost of legal action would outweigh the amount of debt.  For small claims, it is ...Read More