Commercial Debt Recovery

Commercial Debt

Letter before Action, Interest and Compensation

Commercial debt is between business entities and derives from unpaid services or goods or failure to perform obligations under a contract. If another business owes you money, we can assist you with our commercial debt recovery service. Many businesses pay once they receive a letter from us demanding payment within seven days.

From the outset, we will work with you to ensure we claim all monies you are owed including any interest and commercial debt recovery fees as set out in your contract or agreement with the debtor. Under the Late Payment legislation, you may be entitled to interest and late payment compensation, we will advise you on this situation should it arise and work with you to find a solution through our commercial debt recovery process.

Debt Value

  • Up to £999.99
  • £1,000 – £9,999.99
  • £10,000 or more

Late Payment Claimable Charges

  • £40
  • £70
  • £100

Alternatively, we can claim interest pursuant to any contractual amount as set out in your terms and conditions/agreement with your customer.

Legal Recoveries - Commercial Debt Recovery

Legal Recoveries are there if at the end of the period there has been no communication or payment from the business. Then, we will begin to discuss Court procedures, timescales, and likely costs involved for commercial debt recovery. We are dedicated to helping you get your money back. We will take you through the step-by-step process of commercial debt recovery, offering our expert and professional advice from start to finish.

Claim Form

We use the quicker Claims Productions Centre to issue claims through the County Court. We can handle any of your defended matters up to and including a final hearing. The work is supervised by Rachael Ward, our COLP lawyer (Compliance Officer for Legal Practice).

Judgment

Once Judgment is obtained and if no payment has been received there are several enforcement methods to be considered and several reports which we can obtain to help us identify which enforcement method is appropriate. We will advise you on a case-by-case basis given the circumstances of the matter.

Enforcement

If a debtor fails to pay following the entry of Judgment, then there are a number of options to consider enforcing your judgment:-

  • High Court Enforcement Agents – Personnel who are instructed under a Writ of Control to attend at a debtor’s property for the purposes of obtaining full payment of the Judgment debt. Enforcement officers are entitled to seize goods to the value of the debt to be sold at auction to satisfy the Judgment.
  • Attachment of Earnings Applications – An attachment of earnings application is made to the Court for the debtor to provide information as to income and expenditure for the Court to assess a fair and reasonable payment arrangement. If the debtor fails to provide the information the Court will contact the debtor’s employer direct and make an order that monies are deducted from the debtor’s salary each week or month.
  • Charging Order Applications Order – A Charging Order secures the Judgment debt against any property owned by the debtor. The Charging Order will often remain in place until such time as the debtor’s property is sold or remortgaged. In some circumstances, the creditor can force a sale of the property once a Charging Order has been obtained.

Insolvency

Legal Recoveries & Collections Ltd can assist you with insolvency, the inability to repay a debt, and issues surrounding it. The actions we take include:

  • Statutory Demands – This is a formal legal demand for payment and failure to make payment, raise a formal dispute or make contact could lead to a Bankruptcy Petition being issued as it’s often the pre-cursor to insolvency action.
  • Bankruptcy Petitions – A bankruptcy petition is presented to the court, allowing a debtor’s assets to be seized and sold to pay off any outstanding debts. Applying for this petition can be difficult, but LRC Ltd. makes the process as simple as possible for you.
  • Winding-Up Petitions – Following the issue and service of a Winding Up Petition a company can be forced into compulsory liquidation. The assets of this company will be distributed to the creditor before the business is dissolved.

Asset Trace Report

During the collections process we can obtain a Mini or full Asset Trace Report about your customer which would provide us with information that we can use to determine the most appropriate action to take. The reports are in-depth and include associated addresses, insolvency details, legal proceedings, target company/business research, active directorships, dissolved directorships, overseas directorships, non-limited company research, shareholdings, and land registry searches.

From the start of our relationship, we will:

  • Save you time and valuable resources in the collection of money owed.
  • Devise strategies to maximise recovery of your debts.
  • Provide you with continued support. advice and assistance throughout the debt recovery process.
  • Ensure that your reputation is always protected by always acting in a professional, compliant, and ethical manner.
  • Provide you with Debt Manager access to enable you to keep updated as to the progress of your cases.
Get in touch

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If you are a business and would like to know more about how we can help you please complete the short form below and we will get back to you as soon as possible.

Featured Customer Reviews

International Credit Insurance Client

We have been utilising the legal review services of Legal Recoveries and Collections (LRC) for the past few years, and we couldn’t be more satisfied. Their reviews are consistently thorough and informative, becoming an essential part of our pre-legal processes. This has significantly helped improve our recovery rates and reduced overall legal costs. The team at LRC are also very easy to work with and always available to provide professional advice when needed. We highly recommend their services.

North East Ambulance Service

As an NHS ambulance Trust, we don’t have in-house debt collection specialists, so find it difficult to pursue monies outstanding once our usual follow up process runs its course. LRC was recommended to us by another local NHS Trust and we approached them to find out what they could offer. We have been using LRC for nearly 3 years now and have not been disappointed. Our collection rate is circa 70% which represents a significant sum of money that is coming back into the NHS for patient care.

The team are very knowledgeable on the best route to recovery but will also advise when its just not financially viable to pursue a debt any longer. We have regular updates and meetings with Andrea the client services manager so everything is kept on track. It’s always our decision but LRC give us the best tools to make the right one.

London Metropolitan University

We have worked with Legal Recoveries and Collections for a number of years now and they have provided an outstanding service to us. We have worked closely with the team and have a good working relationship with both Rachel and Andrea. Their online portal is very user friendly. They have collected both pre-legal and post legal debts for us to a high standard and we would recommend their services to anyone considering using them going forward.

Utilita Energy Limited

We contacted LRC when we wanted to strengthen our collections processes and recover debt after we had exhausted our internal processes attempting to collect. From the off, LRC offered exceptional advice and support and helped us shape the way in which we approach collections. The team at LRC have a wealth of knowledge and experience which has enabled them to collect a significant amount of money on our behalf and through their professional approach have helped to change customer behaviour in many cases from infrequent to regular payers. LRC have tailored their collections activities to meet our needs and regularly make suggestions to make sure we spend our money wisely to ensure maximum return from their services . We are currently working with LRC to create a bespoke training package that they will deliver to staff across the business who manage and recover debt. I would not hesitate to recommend LRC for debt recovery.

James Paget University Hospitals

We have worked with LRC for about 9 years now and throughout this time they have provided us with good customer service and are always prepared to go that extra mile. Their recent gaining of ‘law firm’ status enables them to now handle the entire debt recovery process for us from pre-legal collections, through to legal proceedings and enforcement therefore ensuring continuity.

E.ON Energy Solutions

LRC have been an excellent organisation to work with. They aspire and deliver to a partnership principle rather than a transactional relationship and as such have helped to unlock our strategic deliverables. They really are prepared to give added value in these times of economic stress.

Commercial Debt Recovery FAQs

Q. Are All Commercial Debts Worth Pursuing?

A. You need to weigh up whether the expenses and energy spent in recovering the debt are justified by the amount you are owed. Sometimes, it might be financially reasonable to write off small debts, however, this could set a precedent for the future. Always investigate why you have not been paid; for example, if your client is unhappy with the service they’ve received, you might want to rectify that first.

It is also very important to check whether your debt has not been paid by a limited company due to its insolvency. You can do this by checking the Government website, Companies House: https://find-and-update.company-information.service.gov.uk/.

Detailed credit checks are also recommended prior to commencing Court action to ascertain the liquidity and creditworthiness too.

If you are still unsure whether or not your commercial debt is worth pursuing, speak to a member of our team for advice.

Q. I’m owed money but I don’t want to alienate a valued client, what do I do?

A. The first thing to remember is that you are running a business, so a client who doesn’t pay on time is probably not as valuable as you think they are. It’s always a good idea to discuss the situation with the client before pursuing legal action to see if there is a way you can reach an agreement. Perhaps they are experiencing cash flow issues and have a legitimate reason for delaying payment.

Failing that, the next step is to send a Letter Before Action (LBA) which sets out what is owed to you and gives a timescale to pay it in. We can help with this process – Many businesses pay once they receive a letter from us demanding payment within seven days.

Q. If I start the legal process with a letter am I committed to further actions?

A. Definitely not. Starting a legal process does not commit you to follow through all the available steps and you can choose to stop chasing a debt at any time. You remain in control and you’ll be kept up to date with the progress of your case at all times.

Q. What evidence do I need to begin the commercial debt recovery process?

A. In a perfect world there would be a written agreement, purchase order and delivery note, however you essentially need proof that the client requested your service or product and that you delivered it. Keep hold of all correspondence such as emails and texts as these could be used as evidence for any legal proceedings.

Q. Can I charge interest on any overdue debts?

A. Under the Late Payment of Commercial Debts (Interest) Act 1998, after 30 days you are entitled to charge interest at the Bank of England base rate plus 8%. You can claim for debt recovery costs, which start at £40 per invoice.

Alternatively, if your terms of business stipulate a set rate of interest you should claim this, this is known as “contractual” interest.

If a client has cash flow problems, it may be worthwhile negotiating a compromise with part-payment and a rescheduling of the debt. This could help you to maintain your business relationship whilst also ensuring you get paid. If this fails and you must pursue a legal claim, it at least shows that you have attempted to resolve the situation fairly.

Get in Touch with Us

If you have any questions about our service or would like to discuss your matters with us in greater detail, please contact the Business Development Team on 0330 024 6342