Important Changes To Debt Collection Protocol Due To Come Into Force In March & October 2015

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Forbes Solicitors examines the impact of the upcoming changes to the debt collection protocol and how it will have an impact on businesses in the UK.

In March 2015, it is proposed that a new debt protocol will be introduced that will completely change the way in which debt recovery claims are made. The new protocol will apply to businesses who wish to claim debts from individuals and will allow the said individuals at least 28 days to seek their own independent advice upon receipt of a “letter before action”. Furthermore, the letter before action will need to include full details of the debt that is being chased; such as explaining whether the debt arises out of a written or verbal agreement and providing appropriate copies of documentation.

This therefore means that a more detailed letter before action will be required and the overall process to recover any debts will be much more time consuming. Based on this, we would recommend that you take a look at your current bad debts and consider issuing your letters before action before March 2015.

Another potential change that has been proposed for October 2015 is that the bankruptcy threshold could be increased from £750 to £5000. At present, a creditor can petition for a debtor’s bankruptcy as long as the debt is over £750. If the threshold is increased, it will radically change the way in which creditors can pursue debtors for the receipt of funds as individuals will have a much higher level of protection. If you have a debt of £750 or above, we would again suggest that you contact us before this new law comes into effect.

Our Debt Collect Team are highly skilled individuals who have extensive debt recovery and bankruptcy experience. We are more than happy to discuss the new changes with you over the phone on 0800 037 4628 or by way of a face to face meeting. If you have any questions you can also use our contact form to get in touch.

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