McHale & Co. Solicitors Blog

Debt Recovery: Prevention and Cure


All businesses are all too familiar with, and keen to avoid, bad debts.  It is interesting to consider how the term came about as I have never come across a ‘good debt’ before!

We all know that debts remain bad until they are paid and that, in the real world, some debts are not paid and must be written-off.  However, there are steps you can take to minimise this and here are some thoughts:

-       check the credit worthiness of your customer;

-       take money on account before carrying out work;

-       ensure that the customer is clear as to the amounts which needed to be paid, when and for what;

-       ensure that your invoices, letters and terms and conditions make it clear when money is due;

-       do not hide payment terms in the small print;

-       talk to the customer about payment and when it is due;

-       stop carrying out further work until you are paid up to date;

-       ensure the customer gets what they pay for!

The above are all practical ways which we are all aware of.  However, ensuring they are dealt with thoroughly will make debt recovery much easier and will save time and costs, in the event of non-payment.

We offer a bespoke service to review your practices and documents in respect of debt recovery and are more than happy to provide an initial consultation, free of charge.


In the event of non-payment of a debt, the first exercise is a cost/benefit analysis of the amount which can be recovered and the amount to spend on recovering it.

The starting point is, of course, to write to the debtor, setting out the basis of the debt and threaten the action which will be taken if not paid.  This is to avoid Court proceedings to keep costs and your time spent on recovery down.

However, where a debtor is not forthcoming with payment, Court proceedings are the only option in order to enforce payment.  There are two options in respect of Court proceedings and the choice very much depends on whether or not the debtor disputes the debt.

If the debt is not disputed, the most effective way is to threaten the debtor and, if necessary, instigate insolvency proceedings at Court.  Due to the severe connotations of such proceedings, they often have the desired effect.

If the debt is disputed then the appropriate forum is to issue a claim in the appropriate civil Court to recovery the monies. 

We are experienced in a wide-range of debt recovery matters, from 7 day chaser letters to issuing winding-up proceedings hundreds and thousands of pounds to issuing complex claims at Court.


Categories: Civil Litigation

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