Focus On: How To Improve Recovery from Debtors
13 January 2023
Debt Recovery & Insolvency
In today’s current economic climate, how you follow up on your aged or overdue debtors is vital. A Letter Before Action is a crucial component in the Debt Recovery process. A Solicitor’s Letter Before Action has a greater impact upon debtors than a letter sent by the Creditor. The written format of the letter ensures that the debtor knows that you are intent on taking legal action but also gives them time to assess and respond to the situation at hand. At MKB Law, many of our cases are resolved at the Letter Before Action stage, minimising the outlays and costs for our clients. If the Letter Before Action is unsuccessful, further legal action may be needed.
Whilst letters are important, they have one significant downfall; the debtor can choose to ignore them, which often results in legal action and additional costs to the Creditor. One element which is harder to ignore, is a telephone call. Picking up the phone greatly increases the chance of collecting the debt. Statistics have shown that this increases the chances of recovery by 20%. Contacting the debtor via telephone means it is harder for them to refuse payment, making the debt more tangible. A call also allows Creditors or their Solicitors to evaluate the situation and explore the underlying issues which may have resulted in lack of payment. In doing so you can determine which debtors “Can’t pay or Won’t pay”.
At MKB Law, our Debt Recovery and Insolvency team implement an excellent credit control process. We are resilient, no matter how old the debt is. We assess each individual debt to ensure the most practical method of recovery. From pre-action letters to all methods of enforcement, we seek to provide an efficient and cost-effective service to all our clients. Our aim is simple; to achieve results. If you or your business requires assistance recovering your debts, please contact our Debt Recovery and Insolvency team who will be happy to discuss the processes available and how to recover any specific debts owed to you.
This article is for general guidance only and should not be regarded as a substitute for professional legal advice.