Q: When the COVID pandemic hit we never thought it would turn into a year-long crisis. We understood that some of our regular customers might have a cash flow problem, and as we were in a healthy financial position at the start of it, we were happy to give them credit. Now the situation is different, and we are experiencing a cashflow problem ourselves. Time to call in the debts we are owed but, so far, our ‘nice’ letters are producing few results. We have two clients who owe substantial amounts and who we fear may go under. What is the best way to deal with these debts?
A: The first thing to say is that you need to get some sound commercial advice relating to your specific situation and client debts. A solicitor who specialises in commercial law will be able to assist you in effectively pursuing recovery of your debts in a way tailored to each situation Your adviser may suggest you send pre-action correspondence and even issue court proceedings if required. Your adviser will also be able to advise you on post judgment enforcement options, should the need arise.
Many law firms offer a range of fixed fees for a single business to business debt that is undisputed. But whether the debt is, dispute or not, single invoice or multiple trade debt, seeking expert advice in the first instance can save you money, and a lot of stress, in the long term. It is certainly worth getting a solicitor to undertake a bankruptcy and/or credit check to assess your debt recovery prospects.
Currently a lot of people are concerned about long court waits for litigation hearings, as the COVID situation has increased the need for debt recovery. However, most hearings are currently being conducted by telephone or video link, which has cut out the time spent sitting around in court waiting rooms while other cases conclude.
This question has been answered by James Denton, a Solicitor with GHP Legal. If you would like to speak to someone about this or any other legal matter it is still possible, and we are doing everything we can to ensure that we continue to offer our high levels of service to our clients. In accordance with government guidelines, most of our lawyers are currently working remotely which means you may not now receive a response as promptly as you may expect. Please kindly bear with us and we will respond as soon as we are able.
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