Debt Collection FAQs Answered

When it comes to debt collection, we know just how complicated it can get. But when you’re not in the business, the whole process can seem confusing and a little intimidating. We promise you that it isn’t – once you get your head around it. To help you learn more about it and feel confident in your decision to use a debt collector in future to chase your unpaid invoices, we’ve put together a list of the questions we get asked a lot, and the answers. We hope they are helpful for you!

Is It Always Worth Pursuing Overdue Debts?

If you are owed money by a client, you should always make reasonable efforts to recover it. After all, that is money that you earned, and that the client agreed to pay. The real question is what lengths you should go to when pursuing it. For example, is the debt significant enough to warrant getting a collections agency involved, or potentially going to court? You want to be sure you have a reasonable chance of recovering the debt to justify the effort of pursuing it.

What Do I Do If My Debtor Has Absconded?

‘Absconded’ is another word for hiding. A debtor who has absconded could be intentionally concealing themselves from you as a creditor so that you can’t reach them to serve court documents or chase payments. It’s not an honourable way to do business, but sadly it does happen, and clients sometimes abscond to avoid paying your invoices. If you no longer know the whereabouts of your debtor, you can hire a debt recovery company to trace them for a nominal fee.

How Should I Prepare For A Court Case?

If you have exhausted all other options for debt collection and have resorted to court action, then you may have consulted a solicitor or a debt recovery agent along the way. They will be able to provide you with advice unique to your situation and prepare you for the case in the best way possible. The best thing you can do to prepare for a court case is to find and collate as much evidence as possible – including a chronology of events with evidence that you are owed money, your response and evidence in respect of any dispute and how you have tried to resolve the dispute and chased payment.

Can I Charge Interest On Overdue Debts?

Absolutely! The amount will depend on what is in your contract. Alternatively, if the debtor is a company, you are able to charge statutory interest at 8% above the Bank of England Base Rate (which at the time of writing is at an all-time high). You may be able to charge a higher rate if it’s detailed in your contract with your client.  The terms of the contract, if you have any, should be used instead of statutory interest.

What Evidence Of The Debt Do I Need To Have?

In an ideal world, you will have a written contract that has been signed by both you and the client. On top of this you should also have other documentary evidence, including invoices or purchase orders and details of any other agreements.

Does Winning A Court Case Guarantee Payment?

Unfortunately, while winning a court case does prove that you are in ‘the right’, it’s not a guarantee of payment. Instead, either because the claim is undefended or because a dispute has been resolved in your favour by the Judge, you’re awarded a ‘Judgment’. If this is still not paid, you can take enforcement action such as, high court enforcement, attachment to earnings or a charging order, in order to reclaim the money.

Of course, if you don’t see your question here, or you want to know about something a bit more specific, then we are always on hand to help. Our debt collection experts are more than happy to talk through your unique situations, give advice, and help you recover debts that are owed to you. To find out more, just get in touch with the team today.