15 September 2020

Debt collection in the wake of the coronavirus pandemic – what are the options

Companies big and small have all felt the impact of COVID-19 in different ways, but one area that has been highlighted for many is the importance of making sure you are on top of managing your cash flow and in particular chasing debts. Debt recovery needs to be an area that you maximise on and follow through with to help you protect the future of your company. It is no stretch to say that many of your creditors will be struggling financially, leaving them with no option to pay their debts to your company or anyone else.

As debt recovery lawyers, one of our jobs is to ascertain the ability of the debtor to repay the debt and uncover their actual financial circumstances. Making sure we follow through on the most effective method to gain maximum debt recovery for your business is a top priority. The truth is you need to separate fact from fiction when it comes to delaying or even deceptive tactics, including claiming they too are suffering adverse financial difficulties due to the pandemic. Not all debtors are truthful when it comes to revealing their real financial situation.

Effective Communication is Vital.

It has never been more critical to make sure that you keep the lines of communication open when it comes to debtors and getting money owed. Many people will be distracted due to current events and could have many issues on their mind. Keeping in regular contact with those who are falling behind or have fallen behind with payments is vital to help you arrange to get back the money owed.

Be as open as you can afford to be when it comes to making arrangements for debts to be repaid, this will put you in good standing should things be escalated further down the line. See if you can draw up a payment arrangement based on the debtor’s current financial situation.

Should the debtor not be in a position to pay, try to avoid paying or refuse to communicate, it is vital for your company that you escalate the issue quickly. Seek assistance from a debt collection law firm as soon as you can to review your options in the future. You can get professional advice over the phone or via video-call, there is no need to visit the office to get the help you need.

Letters Before Action (LBA)

A debt recovery lawyer can send a letter before action to your debtor to inform them of further action to be taken should they continue not to honour the debt and repay in full. Most debtors want to avoid further proceedings and will act upon this to clear the debt. 

A letter before action sets out three main points;

  • The details of the debt being chased
  • Consequences of ignoring the letter
  • Deadlines for payments or a response from the debtor.

Court Proceedings for Debt Recovery

Should you not receive a satisfactory response to the LBA, then the next step is to initiate court proceedings. Both the County Court Money Claims Centre (CCMCC) and the County Court Bulk Centre (CCBC) are both open during the pandemic to deal with debt recovery proceedings during COVID-19.

Enforcement Action

Enforcement agents are not currently permitted to attend residential properties under writs of control due to an amendment to the Taking Control Of Goods Act (2013) made by the Government. Instead of home visits, enforcement officers are working to collect debts via phone, email and text messages.

 

our lawyers deliver an excellent quality service, independently recognised by The Law Society and our many returning clients.

important notice

Howell Jones solicitors continues to be open for business during the COVID-19 pandemic.

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