Debt Recovery: Fact Sheet 7 Are you spending good money to chase bad?
It is a fact that there is little point chasing a “man of straw”. The difficulty is not normally accepting this as a fact but identifying whether a particular debtor is indeed a man or company of straw.
There are steps you can take to help make your assessment before incurring the costs associated with issuing County Court proceedings:
Make enquiries with staff that have been out to your debtor’s premises to identify possible assets that the debtor may have. What assets were at the premises? Stock? Computer Equipment? Vehicles? Machinery? If there are assets of value at the premises, once a County Court Judgment (“CCJ”) is obtained, you can instruct a High Court Enforcement Officer to repossess these assets which will then be sold and the money paid to you in settlement of the debt.
Make pre-litigation enquiries regarding the debtor. How? We can help you with this:
Run a financial “health check” on your debtor
We charge £10.00 plus VAT for this search and report. This search is extremely cost effective when considering the potential wasted costs for pursuing a debtor that is a man / company of straw.
The report, which will be sent to you, will look at:
The debtor’s “health rating”; whether the debtor is considered to be “high risk” in terms of their financial position.
Whether there are any CCJ’s against the debtor and whether these have been paid.
The debtor’s last filed accounts including balance sheet (and any assets identified on the same) / profit and loss accounts / cashflow and turnover (where such information has been filed with Companies House).
Whether any petitions have been filed for the winding up of the debtor.
The debtor’s trading address.
The details of the debtor’s directors and shareholders (if a Limited Company).
The report will enable you to identify a) whether it is financially worth pursuing the debtor at all; and b) what the best enforcement method will be to increase your chances of a successful recovery (e.g. an application for a Charge over your debtor’s property).
If your initial investigations lead you to believe that your debtor is not a company or man of straw, it is important to ensure that it is cost effective to pursue your debtor and that any legal fees you incur are proportionate to the debt owed.
Breeze and Wyles offer a low cost debt recovery service with our fees for chasing your debtor starting at £2.00 plus VAT for a Letter Before Action and depending on the amount of the debt, between £65.00 plus VAT and £170.00 plus VAT for issuing proceedings. Our fees are fixed allowing you the comfort of knowing the true cost of pursuing your debtor through the Courts.
If you would like further information regarding our debt recovery service, please contact our Rita Wright at email@example.com or 01992 558411.
© Breeze & Wyles LLP 2013