When to Turn to the Courts for Debt Recovery


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When to Turn to the Courts for Debt Recovery

Although it might seem like a good option to take a claim for debt recovery through the courts, careful consideration must be given to whether this is the right course of action to take. Some points to bear in mind are as follows.

How Much Will it Cost in Relation to how Much is Owed?

The costs of taking court action could be considerable, particularly if larger amounts are owed. Alternative methods of debt recovery could produce the same outcome but over a shorter period of time and for less expense. Costs could be awarded if the outcome is successful, although courts have been known to withhold an award for costs, if alternative dispute resolution methods have not been attempted first.

Is all the Necessary Information Available?

Gathering information about the debtor should be a priority. Information such as who they are, what they do, what assets the debtor has that can be pursued, if guarantors are involved and whether there are any CCJ's against the debtor. If the debtor is in business, it is worth investigating if they still trading. All this intelligence can help when making a decision about the best way to pursue the debt.

What are the Alternative Options?

The ongoing relationship with a customer is an important consideration and taking court action against them might alienate a valuable client. If an alternative way forward can be negotiated, such as payments in instalments, partial payments or payments up front for any future purchases. This can be a way of avoiding court action and maintaining a good relationship with the customer. Use of a debt collection service is another option to consider.

Ultimately, there are different solutions for each individual circumstance. Methods of debt recovery that might work with one client may not be appropriate for another. It is important to choose carefully which cases are worth pursuing, which debt can be negotiated, and which to set aside and put down to experience. 

For more information, free initial advice or a general discussion, please contact AR Legal Collections on +44 (0)20 8202 0730.


Tags: Debt Collection,  When to Turn to the Courts for Debt Recovery, CCJ, Debt Recovery, Debt Collection Service, Debtor, Court Action



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