What Action Should You Take To Recover Company Debt?

When a client owes you money, but you think they are avoiding you, just know that your options are by no means limited. There is an extensive part of the law, that is dedicated to recovering money that is owed to enterprises, whether it be by clients, customers, or even governments. There are no excuses why payment does not follow from service or product. Customers may try to become insolvent or they may just be in that situation before you knew. So you may feel that in these types of circumstances you have your hands tied behind your back. But nothing could be further from the truth. Let’s take a look at your recourse of action options.

 

Send a letter

It may seem trivial at first, but writing a letter of demand is not something to turn your nose up at. The reason? You are officially making it clear that you are going to take action if your demand for outstanding money is not met. Even though a client may fully know what they are doing, in that they are withholding payment, they may complain to the legal authorities that you have taken sudden action against them. So, this way you have a period of notification already in your file. The other party cannot say, you didn’t warn them. Here are the things to put in your letter.

 

• Reprint the invoice that you originally sent them and let them know this is what the letter of demand is for.
• Let them know that you are keeping records of all the communication you have had with them.
• Record the letter of demand yourself, i.e. only give them a copy of the letter, you keep the original. 
• Let them know how long they have to respond and pay the outstanding money. This is something you should find out with regard to corporate law.

 

Send them reminders

 

Much like the letter of demand, once you have sent that, send some notifications. Again, you may think this is trivial but it’s actually building up strength before you push the nuclear button. Just picture in your mind, standing before a court of law dealing with corporate matters. There will be tons of lawyers on either side and it bodes well for you to have lots and lots of reminders, emails, letters, and such. It’s good practice to send at least 3 reminder letters after the letter of demand. 

pixabay

 

Speak to the debtor in person

 

It’s highly advisable that you try to meet the person you are trying to gain money that you are owed from. For your safety you should try to do this in a public space. Call them first to see if you can set up a quick coffee chat meeting. More often than not, if the other party does have the intention of paying, they will say yes. Other times, they will lead you on or they will flat-out reject any such meeting. When you get home, make a transcript of what you said and what the replies to you were. It’s a little bit sketchy but if you can record the meeting. You may not be allowed to use this in court, but at least it will give your legal team some directional pointers when it comes to asking questions to the other party.

 

Track them down

 

Some debtors just vanish off the face of the earth. They shut up shop and move away, or their online ‘business’ just seems to disappear overnight. In that case, you really are going to find it difficult to hunt them down on your own. So, employ the services of a trusted debtor tracing company that knows how to track and find anyone. They have experience in finding people who owe money, as well as businesses. They can do an E-trace service, whereby they just search for the online business such as an Ecommerce business, around the web. Astonishingly, they only charge you £25 for this. Speak to them about your problem, show them the history of your communication with the client, give them their phone, email and website. Let them handle the rest.

 

Taking the charge

 

Okay, if any of the above hasn’t worked, then you need to get serious. A charging order is a powerful tool that you can use to twist the thumb of the debtor who is not paying up. This is when you go through the process, hiring a creditor company that will put out a charging order on the client’s buildings or land. This is only possible, however, if you have this in your contract before you do business. So, work with a crediting company to whom you can sell your outstanding invoice to, who will then use their powers as a creditor to put a charging order on the client. It acts like a mortgage on the client’s buildings and land, be it a home, commercial office or personal home. If the debt isn’t paid the creditor could sell a piece or all of the property to recover the missing money. Pretty brutal, but this is your killer blow if you can’t do anymore.

 

Just annoy them

 

Maybe you’re a small business owner, an entrepreneur who doesn’t have any of these means. You can still annoy the heck out of them. You can do a public money-gathering event, such as a GoFundMe project, making it about the money that you are owed by the client. Use their business name, image of the person and tell your story. Maybe you are owed £2,000. If you do around-the-clock marketing, you could embarrass the client into paying you or simply take the donations of good well-wishers to recoup any loss.

Recovering a debt that is owed to your business is something that every business owner has had to do at least once. It’s time-consuming and it makes you lose faith in the honesty of potential future clients. But do these things and you can at least have a good chance of limiting the financial blow to you and your enterprise.

 

*This is a collaborative post.