Law

Frettens’ Jason Grimster answers your questions on recovering business debts

By Jason Grimster [email protected]

Published: April 2, 2024 | Updated: 2nd April 2024

Debt recovery can be difficult, especially if the debtor you are trying to recover money from someone who isn’t responding to you.

Frettens logo

However, there are some steps you can take to make sure that any debt is paid.

In this month’s Legal Q&A, Debt Recovery Expert Jason Grimster answers your questions on debt recovery, how it works and the process involved.

How does debt recovery work in the UK?

There are a couple of things you can do to try to recover the debt without resorting to legal action, including:

  • Reaching out to the debtor directly,
  • Negotiating with them, to try to come to an agreement,
  • Instructing a debt collection agency to recover the funds on your behalf,
  • Mediate with the debtor to try to reach a resolution,
  • Threaten legal action, to encourage them to repay the debt.

In some cases though, legal action is a necessary step, so make sure to keep a record of all of the above steps you have taken so that you are prepared if things do go to court.

Related: What can I do if someone defaults on my personal loan?

How long does a company have to recover a debt?

In the UK, there’s a limitation period which dictates how long you have to take legal action to recover an unpaid debt.

How long you have depends on the type of debt but, generally for most simple debts, you have six years to legally enforce it from the date the debt became due.

This period may be extended in certain circumstances, such as if the debtor recognises the debt or begins to pay it back. And, in some cases, there may be no limitation period if, for example, the debt is related to a mortgage, judgement or certain types of government debt.

After this limitation period expires, you will lose the right to take legal action to enforce the debt. However, because the debtor technically still owes you, you can still ask for it to be repaid – just not through legal action.

To find out exactly how long you have to recover your debt, we’ll need to know the circumstances of your case. Please get in touch with our bright debt recovery team on 01202 499255.

Related: A guide to personal guarantees & the risks

What is the debt recovery process UK?

The first step to recover a debt is to contact the person/company who owes money.

If the debtor doesn’t respond to your initial contact, you can send a Letter of Claim that warns them of your intention to take legal action if the debt isn’t repaid within a certain time period.

After this period, if they have yet to settle the debt, legal action can begin. This would involve launching a claim through either the County Court or High Court, depending on how much the debtor owes you.

During court proceedings, the debtor is allowed to respond to the claim. At this point, they may dispute it and provide reasons as to why the claim is invalid. Once the debtor’s argument has been heard, or if they fail to respond, the court will make a judgement.

As part of this judgement, the court will provide instructions as to how and when the debts should be repaid to you.

Related: Can I claim against an estate if the deceased owes me money?

What does a debt recovery solicitor do?

A debt recovery solicitor will provide you with guidance as to what is the best route to take to recover your debt, and assist you in drafting letters to the debtor, negotiations, filing claims and more.

Debt recovery proceedings can be a minefield, so it’s always best to have a solicitor on side right from the start to ensure that the correct legal action is taken and that you have the best chance of recovering any debt.

Plus, if legal proceedings do arise, it’s beneficial to have a solicitor already instructed, as they will understand the complexities of your situation without having to be brought up to speed before representing you in court.

You can read the full version of this article, where Jason outlines what happens if someone doesn’t pay a court order, how to write a debt collection letter and more, here.

Specialist Debt Recovery Solicitors

If you have any questions following this article, or would like to discuss your options with an expert, please don’t hesitate to get in touch with our bright Debt Recovery team.

We can provide tailored advice and assist you in contacting the debtor, drafting a letter and going to court.

You can call us on 01202 499255, or follow this link for a free initial appointment.

To get the best of Dorset Biz News straight to your inbox every week, sign up for our newsletter!

Latest Posts

Trethowans makes double Central South partner promotion

Trethowans signs up for sixth successive year supporting Bournemouth Pavilion

Frettens’ Jason Grimster answers your questions on recovering business debts

Trethowans launches non-confrontational service for divorcing couples

Four new property and estate planning and tax specialists welcomed to law firm

All Law Stories »

Latest Posts

100-year-old Wimborne independent electronics store goes solar

Rising star Marcus climbs the ladder at Wyatt Homes

New estate agency opens in Poole promising service, experience and attention to detail

Read the latest news from Lewis-Manning Hospice Care and learn ways to get involved in our community

Extra tickets released for Walk, Talk and Collaborative Lunch property event in Bournemouth

All Latest News »