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How does the legal system work?
In the event that having carried out our collection process and been unsuccessful in obtaining settlement from your debtor, we will discuss the options regarding legal action. At Financial Recoveries part of our collection process is to evaluate your debtor’s ability to pay should legal action be successful. At this stage we will be able to advise you the reasons as to why we either recommend or discourage legal action. We know that somebody owing your company money can sometimes come down to principal but we also look at the expenditure of our client’s money commercially.
There is little point paying an extra £1500 in solicitor’s costs and legal fees, if from the start we know that there is a slim chance that your debtor will settle a judgment against them. There are many ways that a debtor can avoid settlement and part of our service is to ensure that all legal action commenced has a high percentage of being discharged in full. There are a lot of options available, from a county court summons to winding up petitions to bankruptcy applications. FRL will be able to advise you which option is likely to be most successful.
In the event that you win your claim against your debtor, you will only be half way there, as you have to receive settlement. There are also many options available here: a charging order against assets, third party debt order, garnishee and warrant of execution to name a few. Deciding which one to choose really depends on your debtor and the debt value. For example, if you have a judgment against a Limited Company that exceeds £600.00, you can enforce this debt through issuing a warrant of execution.
This action will send the court bailiffs to your debtors’ premises to either receive settlement or to remove goods to the value of the debt. For enforcement, you can use either the County Court bailiffs or the High Court Bailiffs. The difference is that County Court bailiffs get paid a salary but High Court Bailiffs are able to charge your debtor a fee and commission and are therefore more effective. This information enables us to recover your debt without wasting time.
All our legal work is outsourced. We use two firms in the UK, one in the North and one in the South, who carry out our legal services. Our bulk requirements enable us to negotiate favourable rates that we pass directly to our clients.
Some clients come to us to request that legal action is carried out immediately. We do not recommend this as there has been no evaluation of the case and therefore we are unable to advise on the likelihood of success. There are also the requirements of the Wolfe reform that need to be conformed with, namely sufficient evidence that all measures have been taken to achieve settlement without legal action and this includes third party assistance. The legal system is a laborious process which your debtor can procrastinate further if they have an understanding of the court system. We find that it is an average of 3 months for a trial date on a defended judgment and this is after the 21 days given by the courts for your debtor to respond to the judgment that they have received.
Legal action should be a last resort and should only be entertained once you have been able to evaluate your case from a commercial perspective, which we can do for your company using our vast knowledge of the system. |
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Consumer Credit License No:
538106 |
Data Protection Registered
Number:
Z8121398 |
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