Promises, promises, promises!

You provided your goods or services months ago but, despite the numerous promises of payment, your invoices still remain unpaid.

The weeks of telephone calls and emails requesting payment appear to have fallen on deaf ears. It is time to take a more aggressive approach, but where do you start?

Statistics show that a letter from a lawyer is more likely to receive a response from the debtor than if it comes from a creditor directly. The most common approach in such circumstances is to send the debtor a letter of demand requesting them to pay within a certain timeframe.

One of the most frequently asked questions is, “So what do you need from us for a letter of demand?”

Generally, what we require is the following:

  1. A copy of the agreement, credit or loan application between you and the debtor, together with any Terms and Conditions (if they are not incorporated in to the document);
  2. Copies of any Guarantee(s) or security provided by the debtor or third party to secure the debt;
  3. Invoices relating to the debt;
  4. A Current Statement of Account; and
  5. Any relevant correspondence between you and your debtor.

An important point to consider is whether there is a genuine dispute over the debt. For example, is the debtor suggesting that goods or services have not been delivered, or the debtor is owed money from you? These issues could obviously lead to possible counter-claims and/or hold up any recovery action, but only if it is considered a “genuine” dispute. From a brief review of your documents, we will be able to advise you of whether there is a risk of a genuine dispute, and to provide you with clear options, so that you are able to consider the most appropriate course of action to achieve a commercial result.

If there is no dispute over the debt, we find that proactive action in addressing the debtor’s claims quickly and efficiently will often produce positive results before any legal proceedings are required.

If the debtor fails to engage with us and there is no dispute with regards to the debt, one option is to consider obtaining default judgment against the debtor.

What’s the Process?

Well, we would prepare a claim and statement of claim setting out your business relationship with the debtor, the details forming the basis of the debt and the amounts outstanding, including interests and costs.

The claim and statement of claim then needs to be served on the debtor. As soon as the claim documents have been served, the debtor has 28 days to file a defence or of course make payment. If the debtor fails to file a defence or make payment, then you can apply for a default judgement order of the amount owed, which usually also will include your legal fees at the court scale.

There are a number of options in relation to enforcement, including garnishee of wages and accounts, seizing assets and bankruptcy.

We invite you to review our debt recovery service section for further details. If you have any questions, please contact us for a no obligation, fee-free discussion.