Good morning. Should you be scared about suing clients for unpaid bills? This is our quick tactical 10 top tips on issuing proceedings against debtors. The advice is not intended to be legal advice and is information only.
1. Do not be scared of issuing proceedings. The procedure is very simple, even more so if the amount is less than £5,000 (soon to go up).
a. Send a letter before action to your debtor. You can purchase a template for £1.99 at https://businessbusstop.com/shop/product.php?id_product=58.
b. Follow through your threat to issue proceedings against the debtor. Avoid delay.
c. The website www.moneyclaim.gov.uk is the easiest way to issue proceedings. It costs a minimal amount (eg £70 for £1,000 of debt)
2. Do not be threatened by your debtor. They may talk about counter-suing you, incurring huge amounts of costs and going bust to avoid paying. All of this is bluff. If your contract is water tight and the debt is simply an unpaid bill, they are unlikely to have a case against you.
3. Stay in touch with your debtor and offer to settle at all times. As a tactic, avoid suing for sums less than £500 unless everything is watertight. Always offer to settle at any stage if the offer includes payment within 7 days. Keep negotiating.
4. Make sure you have records of all conversations, copies of contracts and any correspondence sent before, during and after the goods or service has been provided. Avoid getting rid of anything at all. You never know in litigation what will be needed.
5. Take any defence or counterclaim with a pinch of salt. If your contract is watertight, the other side will not have a claim against you.
6. Keep to all court deadlines for issuing documents etc..
7. If you manage to settle before the hearing, get the Defendant to sign a consent order. A template is available for £1.97 at https://businessbusstop.com/shop/product.php?id_product=68. The main thing to remember is that your debtor can agree a figure orally with you but then never pay, even though you may have already cancelled proceedings. If you sign a consent order it gives you grounds to go back to court and ask for judgment you can then enforce.
8. Before you start issuing proceedings, check that the defendant has sufficient means for you to recover your money….
9. Avoid settling to avoid court action. It isnt that hard to deal with, but similarly remember how much it could cost…
10. The judge will treat you well if you are unrepresented at a court hearing. Small claims hearings are informal and fairly laid back on the whole.
This tip sheet is presented to you by BusinessBusStop.com, specialist online business document providers. For details of our services please visit www.businessbusstop.com/shop. If you cant see what you are looking for, let us know – we will certainly be able to assist…