Debt Recovery Disputes

Debt recovery can be a real challenge for businesses. When a business is owed money or chased for payment that is outstanding, it is likely that a debt claim could follow if matters cannot be resolved.  Our solicitors act for both claimants and defendants in debt recovery claims.

Disputes in relation to debt recovery claims may include late payment of an invoice, failure to pay an invoice or an issue with goods or services which in turn result in the non-payment of an invoice. Straight forward debt matters can often become rather complex where the debt is disputed due to problems with the delivery of the goods and services. Therefore, before taking court action, there are a number of options you may consider taking:

1.  Start a dialogue with the opponent to understand the circumstances behind the non-payment of the debt.
2. Consider entering into a repayment agreement in an attempt to resolve matters.
3. Consider writing formal payment reminders with a final payment reminder before starting legal action.
4. You may consider a mediation or alternative dispute resolution in an attempt to resolve the debt claim.

If you are claiming a debt from another party, it is worth first checking whether your opponent  has sufficient assets before commencing a claim. Afterall, a successful judgement may be meaningless, unless there are sufficient assets to enforce the judgement against. Our solicitors can assist you in ascertaining whether there are likely to be sufficient assets before commencing a claim. 

If you continue with a money claim, you may wish to consider the following: 

1. A claim can be brought or defended online or through the use of hard copy forms.  
2. To be able to use the Money Claim Online Service, the claim must be:
   1. For a fixed sum amount less than £100,000.
   2. Against no more than two people or organisations.
   3. Sent to an address in England or Wales with a valid postcode.
3. Where a hardcopy form is being used, claimants should use the N1 Form which clearly sets out details of the claimant, defendant, the basis of the debt and where there is a written agreement between the parties, this should be appended to the claim form. A common mistake is that claimant fails to claim for commercial interest, therefore, do not forget to include a claim for the interest on commercial debts.
4. The N1 form should be sent to the County Court Money Claims Centre and a court fee may also need to be paid.
5. The Court will issue the claim and send a copy of it to the defendant who will in turn will generally have 14 days to provide a response. 
6. The parties will be invited to complete a Directions Questionnaire to decide which track to allocate the case.
7. Depending on the complexity and the sum of money being claimed, the court will allocate the case to either the Small Claims Track, Fast Track or Multi Track. Our solicitors can assist you with navigating the various tracks.
8. It is likely that the court will set deadlines to meet various tasks before the trial following which the parties will be invited to a trial (unless the matter settles).

If an individual or company owes money, it may be possible to serve a statutory demand. Once a statutory demand is served, if the debt is not paid within 21 days, a claimant can apply to wind up the company or make the individual bankrupt. 

A statutory demand can only be issued where there is no dispute surrounding the sums of money owed and where the debt is more than £750 for company debtors and equal to or more than £5,000 for individual debtors. It is important to note that the Corporate Insolvency and Governance Act 2020 has amended thresholds until at least 31 March 2022 in relation to commercial tenancies that are unpaid by reason of a financial effect of coronavirus. For other debt there is a new threshold of £10,000 for winding up petitions that takes precedence over the £750 threshold for statutory demands. 

If you are a debtor and believe that you have incorrectly received a statutory demand, it may be possible to apply to have it challenged or “set aside”. Our solicitors can assist in the merits of any such application.

Whether you are a claimant or defendant to a debt recovery action, the solicitors at Wyn Legal will help you:

1. Provide a same day debt chaser letter.
2. Draft formal letters before action and letters of response.
3. Robustly claim or defend a debt.
4. Draft all the relevant court documents and represent you at court.
5. Resolve the dispute before commencing or defending a claim. This may involve partaking in a negotiation exercise or some other form of alternative dispute resolution.
6. Draft a statutory demand or apply to have it set aside.
7. Represent you through the bankruptcy or insolvency proceedings.