Q. How do I demand payment of a business debt?
A. The Practice Direction on Pre-action Conduct and Protocols requires you to send a “letter before action” in first instance which sets out your claim, and gives the company a final chance to make payment to you failing which, court proceedings will be issued.
Q. Can I apply interest to the debt?
A. In most cases interest is applicable at the rate of 8% above the Bank of England base rate.
You can usually claim compensation for late payment too.
You may be able to claim contractual interest if there are provisions in the contract or, in the terms and conditions which enable you to do so in the event of late payment.
Q. Can I instruct mfg Solicitors to send a letter before action?
A. Yes. We offer a fixed fee service whereby a letter before action costs as little as £15-£25 plus VAT depending on the value of the debt.
Q. Will I have to issue court proceedings?
A. If you do not receive payment following the letter before action then you may wish to issue court proceedings with a view to obtaining a County Court Judgment (CCJ). However, other options may be available to you. This is determined by us on a case by case basis.
Q. What if the debt is undisputed?
A. If a company owes a debt of over £750 and the debt is undisputed, then you can take steps to wind the company up. The first step is to serve the company with what is known as a statutory demand which gives the company 21 days to make payment failing which it will be deemed to be unable to pay its debts.
We are able to carry out company searches in most cases which can reveal whether the company is likely to have sufficient assets to pursue.