To pro­tect your cash flow you need to ensure that your busi­ness can col­lect bad debt. This is a com­mon area of busi­ness activ­i­ty and there is a well estab­lished legal process for debt col­lec­tion for businesses.

• Let­ter of demand is sent to the debtor. This debt col­lec­tion let­ter needs to be legal­ly admis­si­ble and so must include include: spe­cif­ic details of the debt, a request that pay­ment be made by a cer­tain date; and a warn­ing that debt recov­ery options will be pur­sued if pay­ment is not received by this date.
• Suing for debt. Court pro­ceed­ings com­mence with the fil­ing of a State­ment of Claim. The Court han­dling the mat­ter depends on the amount of the debt and the forms required vary so it’s impor­tant to seek legal advice at this stage.
• The way that the debtor responds to the State­ment of Claim deter­mines the next steps. They may agree to an instal­ment order, they may not respond at all in which case a Court Judg­ment will be obtained or they may file a Defence.

• Seiz­ing prop­er­ty, where the debtors goods are seized and sold at auction
• Sell­ing property
• Sum­mons, where the debtor has to attend a pub­lic Court exam­i­na­tion to explain their assets and liabilities
• Bankruptcy/winding up proceedings

We have expe­ri­enced busi­ness solic­i­tors who are com­plete­ly at home with the legal process­es involved in debt recov­ery ser­vices. We can help you at any stage of this process of recov­er­ing a busi­ness debt, whether it is help­ing you write an effec­tive and legal­ly sound let­ter of demand, or pur­su­ing the mat­ter through the Court sys­tem. Our debt solic­i­tors are famil­iar with the process of enforc­ing Judg­ment and can man­age the process right through to bank­rupt­cy or com­pa­ny wind­ing up pro­ceed­ings if need be.

We are also well aware of the costs of debt lit­i­ga­tion and can advise you on whether it is com­mer­cial­ly viable to pro­ceed to Court.

One way to pro­tect against bad debt is to review your con­tracts, trade agree­ments and terms of trade. We can help you make sure that your terms are clear and your process­es sol­id so you can avoid lengthy and cost­ly lit­i­ga­tion pro­ceed­ings in the future.