When an individual or a business has an unpaid debt, the creditor can pursue payment through commercial debt recovery.
How does commercial debt recovery work?
The process of commercial debt recovery usually involves four steps, listed below.
Letters Before Action A letter is sent to the debtor stating the value of the debt. This letter gives them a set amount of time to pay the debt back before a legal claim is made.
Legal Claim If a letter of action has been sent and the debt is not paid within the period specified, legal proceedings can take place. The creditor may now make a legal claim through the County Court. The debtor will be sent a court form which informs them that they must pay the debt, plus any interest or costs incurred, within 14 days.
County Court Judgement If the debt is still unpaid 14 days after the court form was received, a County Court Judgement will be issued. The County Court Judgement is the final decision of the Court, and it gives the creditor power to enforce debt collection.
Enforcement When a County Court Judgement is issued, collection of the debt can be enforced. If the debt is under £600, a Bailiff will be sent to the debtor’s premises. If the debt is over £600, an Enforcement Officer will be sent instead. The Bailiff or Enforcement Officer will gain access to the debtor’s premises and recover the debt either from the debtor themselves, or by taking assets from the debtor’s premises to the total value of the debt.