Recovering debts can be an expensive and stressful process. In this article we offer advice for recovering debts from individuals, sole traders and companies.
Being owed a debt is frustrating. Throwing good money after bad only compounds the frustration and is a situation that can often be avoided. Issuing proceedings to recover a debt is not without cost and you need to be sure it is a worthwhile exercise.
Ensuring a debtor is worth pursuing is paramount to success. Due diligence is key.
Advice for recovering debts
Individuals and sole traders
Assessing an individual’s ability to repay starts long before they become a debtor. As a customer, they may give you a number of clues on their current situation.
- Have they mentioned work? / Are they employed?
- If you meet your customer face to face, is their vehicle expensive or are there company logos or decals present?
- Do they own their house or live in a particularly affluent area?
Simply paying attention to your customer can give an indication of how likely you are to recover any debt that may become due.
These points can be verified by our team. We can:
- Undertake searches of the Land Registry to check for property ownership;
- Check insolvency registers to ensure the debt is recoverable and not subject to an IVA or Bankruptcy;
- Verify address details as individuals often move around and nothing frustrates the process quite like no line of contact to your debtor; and
- Search the register of judgments for existing County Court Judgments against them.
Company debtors can be a little easier to assess. Companies House could hold a large portion of the desired information.
- The overview page will contain company status and whether they are subject to any insolvencies;
- The filing history will show any change of address or directors;
- The accounts filing will give you an idea of their profit/loss (these could be up to 12 months old); and
- There will be documents filed if there are any charges held over the company.
We can further improve on this information with Land Registry searches for property ownership and last but not least, do not forget the importance of word of mouth. Have you heard rumours that the company is struggling?
In conclusion, knowledge is key and good due diligence will increase your prospects of success.
If you are struggling with recovering debts or just looking for some best practice advice, then please do contact our Debtlink team below.