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What are the most effective ways to maximise your business debt recovery?

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Now that court fees have increased...

From the 9th March 2015 the Ministry of Justice increased the amount required, to be paid to Court, just to commence proceedings. In some cases the issue fee can be as much as £10,000!

These increases do apply to business debt recovery claims and a summary of the costs are as follows:

•   Court fees for claims of up to £10,000 will remain the same (£35 to £455).

•   Courts fees for claims above £10,000 to £200,000 will increase to 5% of the claimed amount (not including interest claims).

•   Court fees for claims of £200,000 or above will be capped at £10,000.

Many believe that increasing these costs is a detrimental move, with strong opposition from The Bar Council, the Law Society and many other legal professionals. The potential prohibitive effect on businesses and their debt recovery is encouraging Claimants to look at alternatives.

Is it therefore time to consider an alternative approach when chasing your business debt?

Where a debt is over £750.00 for instance and is not in dispute, (i.e. where the debtor is simply unable to pay, prioritising other creditors or simply ignoring the debt) the effect of Winding Up proceedings or Bankruptcy proceedings in some cases can be quicker and cheaper in terms of recovery than issuing a County Court Claim Form.

The procedure is not suitable for all debts but where Creditors are looking for a strong solution and with an eye on cash flow, Winding Up proceeding and Bankruptcy proceedings can be very effective.

To discuss any of your business debt collection issues please call me, Dan Carlton, Head of Debt Recovery team  on 0113 246 0622 or drop him an email daniel.carlton@clarionsolicitors.com.

Disclaimer: Anything posted on this blog is for general information only and is not intended to provide legal advice on any general or specific matter. Please refer to our terms and conditions for further information. Please contact the author of the blog if you would like to discuss the issues raised.