Debt Recovery: Case Study

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Article

26 October, 2020

Below is an example of a recent Forbes Collect matter in which a debtor refused to make payment initially, and then we went on to make a full recovery for our client including additional interest and costs.

Background

We were recently instructed by a company who had provided professional services to a client pursuant to a signed contract, and subsequently raised invoices for the service provided. Their client failed to make payment or respond to any attempts to make contact.

LBA

The invoices went unpaid and Forbes Collect were instructed to issue a Letter Before Action (LBA) to the debtor. We therefore reviewed the relevant terms of the contract and drafted the LBA to reflect the outstanding debt, interest and compensation due to our client as a result of the debtor's failure to pay.

Response

Initially, the debtor attempted to dispute the debt. We realised that this was a futile attempt to avoid payment and liaised with our client to provide a full response to the debtor and refute any claims made. We did not receive a response from the debtor.

Proceedings

As the debtor could not provide any further information to dispute the debt, we issued a claim on our client's behalf for the outstanding monies, interest, compensation, and costs. The debtor again failed to respond to the claim. As such, we entered for default judgment and this was granted to our client.

Payment

Once judgment was obtained, this prompted the debtor to make payment in full of all outstanding monies including the extra charges added to the initial debt. This was a great result for our client as they were able to recover their outstanding invoices together with those additional costs.

Even though sometimes debtors can attempt to avoid payment, it is essential to continue to pursue your debts, particularly during this uncertain time when cash flow is so important. Obtaining a Judgment against a debtor can often be a great tool to recover your debts, especially as the debtor then has 30 days to make payment and avoid the Judgment remaining on their record for 6 years, which is often a huge incentive to pay.

Please do not hesitate to get in touch with Forbes Collect should you wish to discuss an outstanding debt or would like some further information regarding how we can help.

For more information contact Sadie Butler in our Forbes Collect department via email or phone on 0333 207 9388. Alternatively send any question through to Forbes Solicitors via our online Contact Form.

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