| Before
You Start Proceedings |
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| How long do I have to pursue a debt? |
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| The Limitation Act prevents a creditor pursuing
a debtor via a County Court claim more than six years from the date of
the debt/invoice. Sherwins Limited will pursue a debt which is over six
years old by sending a solicitor's letter, making telephone call outs
and by sending debt recovery officers to the address of the debtor to
recover the debt. |
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| What information do you need to start
recovery action? |
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| The details of the debtor (name, address) and
debt, for example the outstanding invoice to which the debt relates. If
there has been any dispute as to the debt or its amount, we will require
details of this in the event that the debtor responds with a dispute or
refers to the dispute, so that we can deal with their response quickly
and efficiently on your behalf. We will require details of the circumstances
of the debtor to enable us to identify how to enforce a County Court Judgment
in the event that one is obtained if the Debtor is not prepared to pay.
We offer a pre-litigation service to ensure the whereabouts of the debtor
and to assist in the identification of the enforcement method. |
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| Do I need to send a letter of claim before
issuing proceedings? |
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| Civil Procedure Rules require the creditor to
send a letter of claim allowing the debtor a 14-day period to discharge
the debt before court action is taken. If this notification is not provided,
the debtor is likely to object to payment of the court fees and solicitor's
costs claimed for the proceedings. |
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| The debtor has not responded to the LBA.
What happens now? |
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| At this stage we can issue court proceedings claiming
recovery of the debt plus interest, court fees and solicitor's costs.
We will contact you to confirm the expiry of the 14-day deadline and identify
the enforcement method in the event that a County Court Judgment is obtained,
so that enforcement action can be sought immediately in the event that
the debtor does not settle the debt. The circumstances of the debtor are
important, because if the Debtor is a ‘man of straw', then the prospects
of recovery are low and therefore the issue of proceedings will cause
you to spend money with little prospect of a recovery. In this instance,
we offer pre-litigation investigations to ensure the whereabouts of the
debtor and to identify the enforcement method. |
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| What are the chances of the debtor paying
if a judgment is awarded? |
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| In our experience, actually getting paid depends
on a number of things. If your debtor has the money or assets to cover
your debt and costs, then the chances of getting paid are good. Unfortunately,
however, obtaining a Judgment and actually getting paid are often two
different things. Remember that some debtors don't actually have the money.
Individuals on low pay or companies with no assets may offer little chance
of success. That is why, unlike many traditional firms of solicitors,
we investigate the prospects of recovery before instigating proceedings.
We will complete insolvency searches and internet searches, and can even
instruct debt recovery officers to attend your debtor's address to ascertain
whether they are still resident or trading from their last known address.
During this visit, we will determine what assets they would appear to
have so that we can advise you of which enforcement steps are likely to
succeed. |
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| What information do you need to start
recovery action? |
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| The name, address, amount outstanding and telephone
number of your debtor, together with a copy of the outstanding invoice.
If you have any correspondence such as letterheads, business cards, compliments
slips, bounced cheques, etc., this will also be helpful in ascertaining
the correct identity and capacity of the debtor. |
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| Can I claim back the costs incurred in
any recovery action? |
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| The answer is usually yes. The court fees and
solicitor's costs, together with statutory interest (currently 8% per
annum), are added on to your claim at issue and will be awarded if you
win your case. In addition, if you are a business you can claim enhanced
interest (8% above the Bank of England base rate), together with a compensation
award pursuant to Late Payment of Commercial Debts legislation. |
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| The debtor seems to have disappeared.
Can you trace him and how much does this cost? |
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| Tracing debtors is all part of our service. We
work on a ‘no trace, no fee' basis, so if we are unsuccessful in tracing
your debtor, you will not be charged. If we obtain a ‘positive' trace,
then our agents charge £42.50 plus VAT, together with our management fee
of £30 plus VAT. |
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| What if the debtor disputes the debt? |
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| If the debtor disputes all or any part of the
debt, they can communicate with you through us. You will be advised of
any offer of settlement made and we can advise you of the prospects of
success if you were to continue to bring legal proceedings. Subject to
your instructions, we can often negotiate a settlement on your behalf. |
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| What if the debtor is in receivership/liquidation?
Can you help? |
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| If your debtor is insolvent, then you will be
prevented from bringing legal proceedings against them. We can check to
make sure that they really are in liquidation or receivership, as some
companies or individuals may claim to be insolvent while continuing to
trade. If they are in fact insolvent, we will make sure that your debt
is registered and that you are notified of meetings of creditors and receive
the liquidator's/receiver's reports. |
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| During
Proceedings |
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| How long does it take to get a judgment? |
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It will usually take one or two days for the court
to issue your claim and send this to your debtor. Once your debtor has
received the claim they have 14 days to acknowledge receipt. If they fail
to do this, you will be able to obtain judgment from day 15. If your debtor
does acknowledge receipt of the claim, they have a up to a maximum of
28 days from receiving the claim to file a defence. Again, if they fail
to do this, you can obtain judgment on day 29.
Only if your debtor defends the claim is it harder to give a time estimate
on obtaining judgment, as this will depend upon how long it takes the
court to deal with the matter through a court hearing. In most straightforward
debt claims you can expect to have a conclusion to the court proceedings
and obtain a judgment within 8-12 weeks. |
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| My debtor is a limited company which is
insolvent. Can I sue the directors instead? |
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The usual answer to this question is no. A limited
company is a separate entity for legal purposes, which means that individuals
behind the company cannot be held personally liable for any actions of
the company, including any debts which the company may incur.
However, in certain circumstances it may be possible to “go behind” this
basic principle and hold the directors of the company liable for the company's
debts.
This is not something which will be applicable in all cases, and detailed
consideration and discussion of individual facts would be necessary to
determine if this is an option. |
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| My debtor has moved abroad. Can I still
pursue recovery of my debt? |
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Absolutely. Regardless of where in the world your
debtor may have relocated to, there are options available to you to allow
you to pursue recovery of your debt.
Depending upon the individual circumstances of the matter it may be that
you issue a claim in this country, and then pursue enforcement of your
debt abroad. Alternatively, a European Payment Order may be the best option
if your debtor has moved to Europe. Finally, there is always the possibilty
of commencing proceedings in the country that your debtor has moved to.
Whatever the country and whatever the value of the debt, there will be
options available to fit the circumstances. |
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| Enforcing
Your Judgment |
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| My debtor has a family. Will I still be
able to get a charging order and sell the property? |
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You will certainly be able to obtain a charging
order, even if the property is owned by your debtor and another party
and even if the debtor lives in the property with their family.
There should be no reason why you cannot then pursue an order for sale
in respect of the property, regardless of the fact that the debtor lives
there with their family.
Whilst the court will, of course, take all of those facts into consideration
when deciding whether or not to grant an order allowing you to sell the
debtor's property, there is no reason why a properly presented case to
the court should not result in you being successful in obtaing an order
for sale. |
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| If I get an attachment of earnings order,
how much will I actually get each month? |
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This will vary depending upon the amount which
your debtor actually earns. In calculating the amount which can be deducted
from your debtor's earnings, the court will draw comparisons with the
amount of state benefits to which your debtor would be entitled if they
were unemployed.
This will form the basis of the minimum amount which your debtor is entitled
to receive in their income. Anything above this minimum level is an eligible
deduction towards payment of your debt. The court will determine the amount
of the deduction which will be made directly by the employer each week
or each month, dependent upon how the debtor is paid.
It is, however, possible for you to request a review of the deductions
if you believe that the debtor is earning more than perhaps has been declared. |
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| How long do I have to enforce a County Court Judgment? |
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| The Limitation Act prevents a judgment creditor pursuing an outstanding
County Court Judgment more than six years from the date of the Judgment
without the leave of the court to pursue this action. In the event that
the County Court Judgment has been secured via a Charging Order, it can
be enforced outside of the six-year period. Sherwins Limited will pursue
a Judgment which is over six years old by sending a solicitor's letter,
making telephone call outs and by sending debt recovery officers to the
address of the debtor to recover the debt. |
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