Printer Friendly

Higgs & Sons urges companies to keep it simple when recovering debt.

Businesses across the region are being urged to take one of three simple actions when recovering debt - or risk throwing good money after bad.

Midlands law firm Higgs & Sons has outlined a three-pronged approach for companies, as the firm reports more and more dispute resolution cases.

Dispute resolution specialist Julia Lowe said if a business or individual is owed money from a debtor, then the options of pursuing through county court, serving a statutory demand or simply writing it off are most common.

Ms Lowe, who has built the largest dispute resolution team in the region, did stress, however, a legal claim was best kept as a last resort.

She said: "Before you commence any formal action you should first consider sending the debtor a letter before action. This is a formal letter setting out details of the debt and demanding it be repaid within a certain time.

"If the debtor fails to pay up, as creditor you have three options. You could pur-suthe debt through the County Court, serve a statutory demand or simply just write it off.

"Notwithstanding mediation or some other form of resolution of the dispute, the County Court offers three procedures for settling disputes. The procedure that applies will generally depend upon the amount of money claimed."

The firm also said businesses should consider a statutory demand as formal demand for debt under the Insolvency Act. Ms Lowe added: "If you've already obtained judgment against the debtor you may enforce it by serving a statutory demand. You could however use the statutory demand mechanism as a stand alone alternative to court action if the debt is not in dispute and is for at least pounds 750.

"Statutory demands should be taken seriously. Once served it requires the debtor to either pay the amount claimed plus interest; pay an amount which reduces the debt to less than pounds 750; offer to secure it against property; offer to repay the debt in a way that is satisfactory to you or apply to have the statutory demand set aside."

While a statutory demand is often cheaper and more efficient than going down the county court route, businesses should be aware that a debtor can apply to court to set it aside if there is a substantial dispute over the money owed.

"Whichever route you take to recover a debt you should carefully consider the advantages and disadvantages of the available methods."
COPYRIGHT 2009 Birmingham Post & Mail Ltd
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2009 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:The Birmingham Post (England)
Date:Jul 15, 2009
Previous Article:Pre-packs offer best chance to save jobs, trade body R3 says.
Next Article:Perfect timing to start up business.

Related Articles
Higgs advises the quick about the dead.
Loans alert to directors; FINANCE: Unsecured lending putting bosses at risk.
Higgs advises insurance specialists; LEGAL FINANCE.
'Keep an eye on law to stop bad debt'.
Higgs & Sons guide to selling up for traders looking to cash in.
Appointments: HIGGS&SONS.
Warning on cash injections; In association with
Nyree joins Higgs & Son; LEGAL In association with
I had to act when dad died of a heart attack.
Midlands law firm Higgs & [...].

Terms of use | Copyright © 2018 Farlex, Inc. | Feedback | For webmasters