Solicitors in Swansea.

How can a debt be recovered?

There are three main ways: through your own efforts, a debt recovery agency or a solicitor.   In most instances, you should try and talk to the debtor first, find out more about their cash-flow situation and see if you can negotiate a new payment schedule.  If you cannot get in touch with the debtor or simply do not have the time to pursue the debt, you could contact a debt recovery agency or a solicitor.  Both will try and establish contact with the debtor and if this fails, several options are available including statutory demands and litigation through the county courts.

What does county court litigation involve?

As with any type of litigation, an application will have to be made stating the particulars of the case.  If the application is accepted, the courts will give the debtor a chance to put in a defence or make a counterclaim.  If your application is accepted, you will be given a hearing through one of three tracks, which depends on the size of the debt and complexity of the case.  These tracks are:

• Small claims – for amounts up £5,000
• Fast-track – for amounts ranging from £5,000 to £25,000
• Multi-track – for amounts larger than £25,000

How are small claims different from other tracks?

Small claims courts are relatively informal.  The process if designed to be accessible and legal representation is not strictly necessary, although if you are uncomfortable representing yourself you are, by all means, allowed to have legal representation.  Unlike most civil cases, witness statements do not need to be exchanged.  The process is generally quicker and waiting times can be considerably shorter.  The waiting time for a multi-track claim could be year or longer, whereas a small claim might be only a few months.

What are statutory demands?

Statutory demands are standard documents which can be sent to the debtor to request payment of the debt.  Typically, a statutory demand will include the creditor’s details, the sum to be repaid, the consequences of the debtor not paying (such as bankruptcy proceedings) and the debtor’s right to challenge the demand.  The demand will give the debtor 21 days to pay the debt (or agree a new payment schedule) or 18 days to challenge the claim.

What are the risks of using statutory demands?

If you decide to use a statutory demand, you should be prepared to follow up the demand with legal proceedings.  If you don’t, the debtor might treat you less seriously and it will become even more difficult to get the money back.  The courts will look unfavourably upon improper usage of statutory demands, especially where it has been used as a threat not backed up with serious intentions. You should also be aware that the debt must be £750 or more to start bankruptcy proceedings.

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