Legal
DEBT RECOVERY AFTER COVID John Osman, Dispute Solicitor, Mogers Drewett
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usinesses and landlords across the country are still feeling the financial pressure of unpaid invoices and rent following the coronavirus pandemic. As life slowly starts to return to normal action needs to be taken now to secure payment of these debts. There are options available to both landlords and businesses who need to maximise their cash flow in these uncertain times. It has been reported that the country’s largest banks are recruiting more than 700 new staff to their own debt collection teams. These staff will be in contact with individuals and businesses who have defaulted on loans and mortgage payments in the coming months. If you are owed money it is better to start pursuing your debts, rather than wait to be pursued by your creditors. If you are owed money you need to remember the three P’s and be: • Positive • Proactive • Prompt You need to be Positive
Although the current economic outlook is uncertain, you need to be positive and remember that there is still a good chance that you can recover the debt. You need to be Proactive
The courts have indicated that they would welcome businesses and landlords being proactive and initially gently reminding their debtors upon the sums owed. By writing in a friendly, constructive tone you can take steps to ascertain your debtor’s true financial position.
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Once they have responded, if you are willing to be flexible you can work with them to discuss repayment options and their credit limits. If an amicable agreement can be reached, that is cost effective and good news, however, make sure you stay in regular contact and make sure they provide regular financial statements outlining their current debt and their ability to pay. Don’t be afraid to ask for debt payments to be increased, if your debtor’s financial position improves. You need to act Promptly
If your debtor refuses to correspond with you or fails to make any repayments, you need to act promptly to prevent the debt escalating. At this point you should consider instructing a dispute resolution solicitor. Instructing a solicitor does not mean that the situation needs to turn hostile, they will use many tools to recover sums for clients, which include: • Informal letters encouraging your debtor to respond • Formal letters seeking Payment Agreements • Letters Before Action, officially commencing the litigation process • Legal proceedings, should not resolution be found Debt collection can be hugely stressful and present a significant distraction for business owners. Should you reach an impasse with your debtor, handing over the process to a dispute solicitor could be a liberating and time-saving decision. mogersdrewett.com
