The aim of debt recovery is either to make your invoices a priority in the “to pay” list, or, if that fails, to compel payment. Legal action will always work best when it is used efficiently as a complementary component to effective credit control and is targeted. It will not however remedy poor lending decisions, as an impecunious debtor will still be unable to pay. Speed is always of the essence in any collection situation and the skill for any creditor is to know when your own efforts have reached their natural conclusion and it is time to increase the pressure. A determined debtor will prevaricate, make offers to pay “shortly” and break those promises, simply because they believe that the matter will go no further. 

It is important that you do not encourage that view. Do not be reluctant to pass it on. A solicitor’s letter at any time can have a galvanising effect. When timed sensibly in relation to your own collection activities it flags up to the debtor that the matter has already gone further and will continue to escalate. It will move your invoice further up their list of priorities. Upon the issue of court proceedings the pressure reaches another level. At each level more of the debtors will pay because that is an easier option than holding out. It is important therefore to allow that progression to continue to its natural conclusion. If a solicitor’s initial attempts to engage and achieve payment are not successful then proceedings should be issued. In the absence of any defence or payment, judgment will follow and then enforcement of that judgment. Targeting the cases which are suitable for proceedings and enforcement is important. There is no point is suing for tiny amounts; for claims where you know full well there is a dispute, nor where the debtor has no means to pay. 

A judgment of itself will not necessarily produce payment and you may have to progress to enforcement action, for example by the use of an Enforcement Officer to levy execution (seize goods) to satisfy the judgment amount. You should have transparency as to the costs involved and in successful cases you will recover most of those costs. Legal collection need not be an expensive option. Graham Penn