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10 facts about business debt collection

17 February 2022 | Richard Gore

Unpaid invoices can cause significant cash flow problems, waste precious time and if unresolved can result in a lengthy dispute. There are several ways a business can approach debt collection. Director and Head of Commercial Disputes, Richard Gore, sets the record straight with 10 facts that will help you navigate business debt collection:

  1. You may not need a solicitor – but, you could save time and money with early advice.
  2. You should send the debtor a claim letter giving them the opportunity to respond before you issue – 14 days should be given to a company and 30 days to an individual.
  3. You can claim interest on an unpaid debt – the rate allowed by the court is 8% per annum, where no interest rate has been agreed, although this can be altered by the court at its discretion.
  4. In commercial debts, you can recover interest either in line with your contractual rate of interest (check your terms and conditions) or under the Late Payment of Commercial Debts (Interest) Act 1988.
  5. With commercial debts, you can also claim additional amounts (ranging from £40 to £100) depending on the amount of the outstanding invoice along with reasonable debt collection costs.
  6. Proceedings can be issued online via Money Claims Online –
  7. Keep an eye on timelines. Once proceedings are issued, the debtor has a fixed period to respond. If they do not, then act quickly as you may be able to get judgment (by default) by simply submitting a form to the court.
  8. Once you have judgment there are various ways to enforce it, including obtaining a charge over any property owned by the debtor, instructing bailiffs (or high court enforcement officers if the debt is over £600), obtaining an order against the debtor’s bank account, or against anyone who owes the debtor money and getting an order against the debtor’s employer to deduct money from earnings.
  9. Insolvency proceedings are also an option once you have judgment.
  10. You cannot get blood out of stone – if the debtor does not have the money, then you may not get paid.

Debt collection legal advice

With many years of experience and strong expertise in litigation both in and out of court, our debt recovery service is fast, efficient and economical. For help with your debt collection problem, please contact our team by calling 0117 906 9400 or email

The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.

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