It’s an age-old problem for small businesses: unpaid debts. However, getting your money may be easier than you think.
Marianne Stirling, our Debt Recovery Manager, seeks to dispel
some of the most common misconceptions.
‘It’s too complicated to pursue debts’
For a hard-pressed business owner, it may be, but a
solicitor can shoulder most of the work. Once they have the relevant information
about the debts, they can take over the legal processes, updating you as they
go.
‘The debt is small; it’s not economic to use a solicitor’
Debts of as little as a few hundred pounds may be able to be
recovered quickly, and solicitors will offer different fee options to allow you
to select the approach which works best for your business.
‘The debts are years old; it’s too late to pursue them’
It’s certainly a good idea to instruct a solicitor fairly
quickly about debt recovery, as the quicker the debt is pursued the higher the
chances of making a recovery. But it’s usually possible to commence recovery
action in Scotland up to five years after the debt first became due.
‘The debtor may not be able to pay’
A solicitor can obtain a ‘pre-sue’ report, to ascertain the
debtor’s likely financial position. For example, this may reveal whether they
own property or are in paid employment, in which case the prospects for
recovery may improve.
‘I don’t know the debtor’s current whereabouts’
This often doesn’t matter. A solicitor can usually locate
the debtor and start proceedings.
‘The debtor isn’t in Scotland, and I don’t want to get involved in a different legal system’
A solicitor who works closely with partners in England (and
further afield) can ensure you have the ability to pursue debts wherever
required.
‘Even with a court order, I’m not sure I’ll get the money’
Once you have a court order, you may need to take further steps to secure payment. There are different enforcement options available, and we can explain the pros and cons of each one to you and help you decide how to proceed.
Published 9 May 2019.
