Unpaid debt warning

A debt recovery expert is advising businesses on the options available if outstanding debts owed them remain unpaid.

Recent figures from Bacs Payment Schemes Ltd, the company behind Direct Debit, showed that SMEs in the UK are owed more than £14billion.

Most businesses are able to successfully chase these debts by invoicing early or other methods, but it may become necessary to turn to the County Court for a judgment which will formally decide the debtor does indeed owe the money.

Sharon Walker, debt recovery manager at regional law firm Napthens, reports that if a judgment remains unpaid, despite repeated requests, a creditor has the option to continue with further enforcement – such as through an enforcement officer.

To do this a judgment obtained in the County Court can be transferred to the High Court and registered as a High Court judgment.

Sharon explained: “A High Court enforcement officer can execute a County Court judgment over £600. Anything under that amount is dealt with by the court bailiff.

“Enforcement officers earn their fees from the debtor when they collect, and as a result do have higher collection rates.

“There are strict rules for the officers to follow, such as not being able to enter a home by force, between 9pm and 6am or through anything other than the door.

“Before any attendance is made to collect a debt, a notice of enforcement will be sent to the debtor to give them an opportunity to pay, and it is common to find that if a debtor has ignored previous requests for payment, a visit by a court bailiff or enforcement officer can often prompt a debtor to agree a payment arrangement.

“Any businesses facing unpaid debts should take professional advice early to ensure they use the correct approach.”