Debt has been a headache for many companies. It is not only a problem for some companies. Even individuals are having the same issue. Client not paying invoices is becoming controversial in the financial market, and creditors can get legal help in dealing with the problem.
The statutory demand
An alternative option is released to help creditors collect the unpaid invoice to the client to issue a statutory demand. A statutory demand UK states, “If the debtor doesn’t pay within the agreed due of payment or 21 days of receiving the demand, then the creditor can apply to the court requesting bankruptcy for the individual and or winded up for the company if the debt is unpaid. The statutory demand under the Insolvency Act 1986.
A statutory demand is a written demand for a debt and is effectively a precursor to insolvency proceedings. The demand can be issued according to the debt, undisputed, and shouldn’t be used where the debtor doesn’t have a bonafide defense and where the debtor has assets. It can be a helpful debt recovery tool, as a threat of bankruptcy or winding up a petition. It is an inexpensive and quick way to determine if the debtor pays the debt owed.
Insolvency Act 1986 was amended to help creditors with the recovery of unpaid invoices of clients or debtors. In the written document, the minimum value of debt for the issuance of statutory demand increases in case of individual bankruptcies. However, the modification doesn’t apply to company insolvencies, it is only for individual bankruptcies. As such, options are limited for the use of recovering small debts.
A debt recovery solution has come up to solve the problem. Clients not paying invoices is no longer a problem today. Debt recovery solutions become the answer to dealing with the clients’ unpaid invoices. A debt collector reports a collection account on the credit report. In some situations, the debt from the original creditor is purchased by the debt recovery agency.
How does a debt recovery solution work?
The debt recovery agency will work on collecting the debt of an individual or company, which is a good option for creditors to solve such headaches of collecting unpaid invoices from stubborn debtors. Using a debt recovery agency helps companies employ a solicitor to take legal action to recover a debt. They charge a fixed fee or take an amount of the money recovered on your behalf.
Recovering debts through the court
If you can’t reach an agreement over the matter in other ways, a claim in court is made. It is used as the last option. It is a good idea to look for independent legal advice. In many cases, creditors face problems with how they collect unpaid invoices and wait a few months to wait until the debtors refuse to pay.
The reason why some creditors feel hopeless in collecting these unpaid invoices is due to stubborn debtors. One way to collect this debt with peace of mind can be through debt recovery and legal services.