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Recovering overdue debt – why it’s important to act quickly

Taking legal action against an overdue debtor should always be a last resort. But with continuing delays in the justice system, there’s even more reason to try and avoid going to court. Moving fast will give you the best chance of a positive outcome.

The justice system is finally showing signs of recovery from the backlogs caused by closure of the courts during the COVID-19 pandemic. However, things are still not back to normal and significant delays are persisting in many parts of the UK.

According to government statistics for January to March 2023, the mean time taken for small claims and multi/fast-track claims to go to trial was 51.9 weeks and 79.9 weeks respectively. Compared with the same period in 2019, that’s nearly 15 weeks longer for small claims and over 21 weeks longer for multi/fast-track claims.

If you’re faced with a debtor who refuses to pay, the prospect of a long, drawn-out legal process is not something you’re likely to find appealing. It’s not just the time, effort and cost that could be involved in the process. Remember, getting a court judgment in your favour doesn’t necessarily mean you’re guaranteed to get paid. There’s always the nagging concern that, at the end of it all, you may only get some of what you’re owed or you have to write the debt off completely.

What can you do to avoid lengthy court delays?

The most important thing to do is to act quickly. The longer you ignore an overdue debt, the less chance you have of timely recovery. Older debts are more likely to require legal action, which could incur further costs for you.

It’s a sad fact that some unscrupulous debtors rely on the fact that some businesses don’t chase debts vigorously enough, taking advantage of that fact to delay payment as long as possible. Why should you compromise your cash flow to benefit theirs?

If you have limited internal resources or your finance team is overstretched, putting the debt in the hands of a professional debt collection agency (DCA) makes a lot of sense. Strike while the iron’s hot – if the debt is fresh in the debtor’s mind, they’ll get the idea that it’s one they can’t easily ignore. What’s more, if a DCA offers a ‘no collection, no fee’ deal, it’s in the agency’s interest to recover the debt as quickly and efficiently as possible.

It's also important to make sure your debt is at the top of the debtor’s priority list. Be confident and show them you mean business. If you don’t chase the debtor vigorously, there’s a danger that other creditors will leapfrog you and get paid first.

Debtors can do a disappearing act

If you leave it too long to chase an overdue debt, there’s a risk of losing touch with the debtor. They may relocate to somewhere else in the UK or even overseas. If you can’t access their new contact details easily, you may incur extra costs in using a tracing service.

Is there a time limit for legal action?

It’s always better to act as quickly as possible to recover an overdue debt. However, it’s worth bearing in mind that, if you’re forced to take legal action, there’s a time limit for doing so. Wait too long and the debt will become ‘statute barred’, which means that it still exists, but that you’ll be unable to enforce recovery via a court judgment.

In England, Wales and Northern Ireland, the limitation period is usually six years. However, if you’ve already started action to obtain a court judgment before the limitation period passes, the debt can never become statute barred.

It’s also worth remembering that important supporting information relating to the debt could be misplaced over time. That could weaken your case and compromise any legal action you eventually take.

Get timely help from debt collection experts

At Redwood Collections, we respond promptly to your instructions, ensuring the best chance of recovering the money you’re owed. Our expert debt collection team will work with diligence and professionalism to achieve positive results as quickly as possible. If it becomes necessary to take thing to the next level with legal action, we can provide authoritative advice and support throughout the process.

Now’s the time to put your overdue debt in safe hands and ensure your business can Grow Stronger.

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