Commercial Debt Recovery Solicitors: Our Panel of Experts

Commercial debt recovery solicitors in the UK play an essential role in maintaining the financial health and operational stability of businesses. These legal professionals specialise in the efficient and effective recovery of outstanding debts owed to companies, ensuring that cash flow remains uninterrupted and financial obligations are met promptly.

With expertise in navigating the complexities of commercial law, debt recovery solicitors offer tailored strategies to handle unpaid invoices, overdue payments, and delinquent accounts.

At Expert Commercial Law, we maintain a panel of commercial debt recovery solicitors. If you would like more information on how we can assist you with debt collection, then please get in touch with us today.

What is the commercial debt recovery process in the UK?

The commercial debt recovery process in the UK involves several key steps designed to recover outstanding debts while maintaining legal compliance and minimising costs. Here’s an overview of the typical process:

1. Initial assessment and documentation

• Review of debt: The first step involves reviewing the debt to ensure it is valid, undisputed, and that all contractual obligations have been met.
• Documentation: Collect and organise all relevant documents, such as contracts, invoices, and correspondence that support the claim.

2. Pre-action protocol

• Reminder letters: Often, a simple reminder or a series of reminder letters sent to the debtor can prompt payment.
• Demand letter: A formal letter of claim is sent to the debtor, outlining the amount owed, the due date, and the consequences of non-payment. This letter serves as a final warning before legal action. This letter formally demands payment of the debt within a specified period, often 7 to 14 days. 

3. Negotiation and mediation

• Negotiation: Attempt to negotiate with the debtor to reach a mutually acceptable payment arrangement or settlement.
• Mediation: If direct negotiation fails, mediation can be a useful tool to resolve the dispute without resorting to court action.

4. Legal Proceedings

• Letter Before Action (LBA): A Letter Before Action is sent to the debtor, giving them a final chance to pay the debt before legal proceedings commence.
• Court action: If the debtor does not respond to the LBA, legal proceedings are initiated. This involves filing a claim with the appropriate court.

5. Court action

• Filing a claim: The creditor files a claim form with the court, which outlines the details of the debt and the amount claimed.
• Court judgment: If the debtor does not respond to the claim, the court may issue a judgment in favour of the creditor. If the debtor contests the claim, a court hearing will be scheduled.
• Enforcement: Once a court judgment is obtained, the creditor can take steps to enforce the judgment. In some cases, a High Court enforcement officer may be granted.

What is a statutory demand?

A statutory demand is a formal written request for payment of a debt exceeding £5,000, served on an individual or a company. It is a precursor to insolvency proceedings and serves as a warning that if the debt is not paid, bankruptcy (for individuals) or winding-up (for companies) proceedings may be initiated.

Outcome of a Statutory Demand

• If the debtor pays or agrees to a settlement within 21 days, the matter may be resolved without further legal action.
• If the debtor disputes the debt on substantial grounds, they can apply to the court to set aside the statutory demand.
• If the debtor does not respond or the debt is not settled, the creditor may proceed with bankruptcy or winding-up actions.

Bankruptcy Proceedings

If the statutory demand is not satisfied, the creditor can petition for the debtor’s bankruptcy. These proceedings are usually issued against an individual or sole trader. This involves submitting a bankruptcy petition to the court, outlining the failure to comply with the statutory demand and providing evidence of the debt.

The court will schedule a hearing to consider the petition. The debtor can oppose the bankruptcy on certain grounds, such as disputing the debt’s validity. If the court finds the petition valid, it may issue a bankruptcy order against the debtor.

Upon declaring bankruptcy, control of the debtor’s assets is transferred to a trustee in bankruptcy, who will manage the debtor’s assets and finances.

The trustee’s role is to sell the debtor’s assets and distribute the proceeds among the creditors, according to a legally defined order of priority.

Bankruptcy significantly impacts the debtor’s credit rating and ability to borrow money in the future. It also imposes restrictions on their business activities.

Bankruptcy is not permanent. In England and Wales, a debtor is usually discharged from bankruptcy after 12 months, releasing them from most of the debts owed at the time of the bankruptcy order. However, the impact on the debtor’s credit rating and financial status can last longer.

What is the role of commercial debt recovery solicitors?

Commercial debt recovery solicitors provide a range of debt recovery services designed to assist businesses in recovering outstanding debts efficiently and effectively. Their expertise in commercial law and debt recovery processes enables them to offer tailored solutions to meet the specific needs of their clients.

Solicitors assess the validity and enforceability of the debt, reviewing relevant documentation and circumstances. They provide expert advice on the best course of action, whether it be negotiation, mediation, or legal proceedings.

Commercial debt recovery solicitors prepare and send formal demand letters that outline the debt owed and the consequences of non-payment. Solicitors can also issue reminder letters and follow up with debtors to encourage payment without resorting to legal action.

Debt recovery lawyers will engage directly with debtors to negotiate payment plans or settlements, leveraging their legal expertise to achieve favourable terms. They can also facilitate mediation sessions to resolve disputes amicably and avoid the costs and time associated with court proceedings.

Solicitors will also draft and file necessary legal documents, such as claim forms and witness statements, to initiate court action. Once in court, solicitors will represent clients in court hearings, presenting the case and advocating for a favourable judgment.

How can Expert Commercial Law assist?

Expert Commercial Law have a panel of solicitors comprising of firms with credit control and debt recovery teams. Most of the law firms on our panel will offer a debt recovery service on a fixed fee, hourly rate, or conditional fee agreement. This will be discussed at the outset of your case.

All of the solicitors on our panel have the experience and expertise required to take on your case. We only select the best in the business. All of our solicitor firms are authorised and regulated by the Solicitors Regulation Authority (SRA) and offer a range of funding options for your case.

We are not a firm of solicitors; we have a panel of cost effective commercial law solicitors. If you contact us in relation to a commercial law case, we will pass your case onto a panel firm.

Our panel can also assist with commercial issues such as business energy claims, shareholder disputes and contract disputes.