Debt recovery: When to get a solicitor

If you are fed up with sending endless emails and letters to your customers who are failing to pay outstanding invoices, you may be considering taking legal debt recovery action.

Unfortunately, getting the money that you are owed is not always straightforward and debt recovery claims are based upon the enforceable contract made between you and your customer.

Normally, contracts will set out the agreed sum which one party will pay and the goods or services that will be provided by the other but may also include other details such as a long-term payment schedule or flexible repayments.

If a customer fails to provide payment by the agreed date, you have sent several reminder emails or letters informing them of the missed payments, and you feel as though the services provided have met those stated in the original agreement you may need to take legal action.

Once breach of contract has been established, it is time to instigate debt recovery proceedings and it is at this point that you may consider consulting with a solicitor for Business liquidation services.

Reasons to hire a debt recover solicitor

There are several reasons why a business or individual may choose to hire a debt recovery solicitor.

These include:

• You are a business owner with a customer who is refusing to pay their debts – Your business relies upon the cashflow from existing clients, and a failure to meet payment deadlines could damage your entire business plan.
• You need expert advice – You might know that you need to take debt recovery action but feel as though you don’t have the expertise required to do so. A solicitor can do this for you, and their presence alone in negotiations if often enough to secure a payment that has been withheld.
• You are too emotionally involved – If you have a long-term personal relationship with a client, trying to recover a debt can be stressful, upsetting, and awkward. A solicitor will put space between you and your client, making the process purely about business.
• You don’t have the time for a lengthy court battle – Running a business is a fast-paced challenging job and a court case is the last thing you need to be spending all your time on. A solicitor will be able to handle all the paperwork and details associated with the case whilst you get on with doing what you do best.

What does a debt recovery solicitor do?

Once overdue notices have been sent to, and ignored by, your customers, it is time to turn to a debt recovery solicitor for assistance.

It is essential that you provide your solicitor with as much information about the case as possible, including payment terms, schedules, the amount outstanding, and what attempts have already been made to try and reclaim the debt.

You should also retain and provide details and evidence of the services that have been provided as the case could rest on whether they are deemed to meet those promised in the original agreement.

Once your solicitor has reviewed all this evidence, they will be able to advise you on the best way to proceed.

The first thing that a debt recovery lawyer will normally do is to send a ‘Letter before action’ to the customer in question, detailing the outstanding debt and indicating that court proceedings may be required.

This may be enough to prompt payment in itself, but if not, your solicitor will them initiate the process of taking the case to court in order to reclaim the money you are owed.

Throughout the entire legal process, your lawyer will keep you fully informed of proceedings, including giving you an idea of the fees that will likely involved before action is taken.

The majority of debt recovery cases never actually make it as far as court, and if your claim has merit, the legal advisors to the other side will likely advise their client to settle.

A good debt recovery lawyer has a good chance of being able to secure payment of your debt in the first initial stage of the process.

Why is debt recovery important?

It is no exaggeration to say that the ability to recover debts can be the difference between success and failure as a business.

Instructing a lawyer to recover debts on your behalf will not only allow you to concentrate on running your business but will also make it much easier to pursue debts with customers you may have a long-term relationship with.

It will also help you preserve cash flow longevity as a business and allow you to plan for the future, confident that you will have the funds to invest that you are due.