26 September, 2019
After 178 years of trading, the world's oldest holiday company, Thomas Cook, has collapsed leaving a collection of issues for many, including their creditors.
Whilst many travel agents have been hit by retail migration to the internet, Thomas Cook's demise is largely the result of the £1.7 billion debt that the group had accrued. Unfortunately for creditors, once a company enters administration, the likelihood of recovery often decreases significantly.
Minimising your chances of being caught by a 'bad debt' (essentially an unrecoverable debt), and a debtor entering into administration, is done by pro-active credit control and ensuring that debts are pursued with appropriate vigour and attention.
What should I do if a debtor has entered into administration?
Firstly, you need to ensure that the administrators are aware of your debt as soon as possible - details of the administrators will be published on Companies House.
You will then need to fill out a 'Proof of Debt' form, which will ensure that you are included in the list of creditors and therefore able to vote on proposals made by the administrators. Some creditors, such as secured creditors, will take preference in this process and unsecured creditors will receive a proportion of any monies or assets remaining, if any, on a pro-rata basis.
We understand that chasing debts can often fall down the 'to-do' list when businesses are extremely busy, and therefore it may be worthwhile instructing a solicitor's firm to help. Forbes Collect can act as an extension of your usual credit control process and run your claim from start to finish; this will ensure that debtors are continuously pursued, minimising the chances of an 'unpaid debt' turning into a 'bad debt'.
For more information contact Annabel Kelly in our Forbes Collect department via email or phone on 0333 207 0702. Alternatively send any question through to Forbes Solicitors via our online Contact Form.
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