How Can I Recover Debts Owed To Me Or My Company?

If money is owed to you by either a business or individual Chan Neill Solicitors is able to assist in recovery of this money dealing with anything from letters of claim up to, and if necessary, the issue of legal proceedings and providing representation at court.

The Procedure of Recovery of Debt From an Individual or Business

The first step when looking to recover a debt is for our lawyers to understand what the debt refers to, the amount that is owed and a full breakdown of that figure.  We would also need to know any interim or part payments that may have been made for that debt or if any response has been received from the debtor in relation to the money owed.

Once we are satisfied that you do have a claim against a debtor the next step is to draft a letter of claim.  The content and structure of the letter of claim differs as to whether the claim is against an individual or a business.

Claims Against an Individual

If you are looking to pursue an individual for monies owed then the letter of claim needs to contain certain information including, but not limited to, the amount that is owed, a full breakdown of the figure, the amount of interest owed and the costs that would also be payable if proceedings are issued.  It is also necessary to include with the letter of claim a copy of a reply form and information sheet.  The individual must also be given 30 days from receipt of the letter of claim in which to respond before any legal action can be taken.

If an individual does respond to the letter of claim either on the reply form sent or by email/telephone, we would be obliged to act reasonably and in a cooperative manner when dealing with them.  What this means that if, for example, the debtor wished to repay the debt but only could afford to do so over an extended period of time because of financial commitments then we would be obliged to negotiate and cooperate with them in this regard.  Should the court discover that we haven’t been cooperative then we risk our claim being struck out if legal proceedings are issued prematurely.

In terms of claiming debt from a business the rules are more relaxed.  It is not necessary to allow a business 30 days in which to respond and you just have to afford them a reasonable period of time i.e. 14 days before you can issue legal proceedings.  The business does also not need to be sent the relevant paper work an individual would or be provided an estimate for the costs and interest if legal proceedings become necessary.

Issuing Proceedings

If the letters of claim are ignored then legal proceedings may be the only option.  Depending on the value of the amount that is owed will depend on the cost of issuing the proceedings (the issue fee) and the legal costs (solicitors fee).  Should the amount owed be above £10,000.00 then the legal costs can potentially be recovered from the other side on top of the debt.

Below are the different type of claims depending on the size of the debt.

Small Claims Track – claims below £10,000.

Claims below £10,000 are processed under the small claim procedure in England and Wales. This procedure is one of the most cost-effective solutions. However, the costs of these proceedings are almost never fully imposed on the losing party.

Fast Track – Claims between £10,000 and £25,000.

The fast track procedure deals with undisputed cases with a value between £10,000 and £25,000. As these proceedings often take more time to process than the small claims track, the costs of this procedure are often (partly) passed on to the losing party.

Multi Track – claims above £25,000.

For complex or disputed claims above £25,000, the multi-track procedure should be followed. On average, these procedures take longer than small claims and fast track procedures. In this procedure, the judge can also decide that the losing party must pay all legal costs.

After Judgment Obtained

If we are successful in obtaining Judgment either in default or after a hearing/trial then we can actively seek to look to recover the money for you with the help of bailiffs (if necessary) or potentially by way of charging order if the debtor owns a property.

Should you wish to discuss any of the matters talked about above or if you wish to look to instruct us, please contact us. Our team speak English, Mandarin, Cantonese, Spanish, Portuguese, Russian etc. Our offices are in Mayfair and the city should you wish to see us in person.

How to look out for scammers and what legal action should you seek?

For the majority of overseas investors to UK companies, hopefully the investments have proven to be lucrative and or provided you with the ability to meet home office conditions. A small percentage of you however are falling victim to very unscrupulous people.

Here is one case we wish to example were we have assisted an investor and an innocent customer with.

The investor was advised that in order to help him comply with immigration visa rules, he could invest in a business opportunity and become a director and Tier 2 employee of a UK limited company. He would also obtain shares for his investment.  The investment was substantial and had been paid to the directors personal bank account on the directors request. Over a period of time, suspicions arose that the monies invested were not being used for the company. However the investor had no access to company bank accounts and so could not confirm his suspicions and he was kept being promised his shares will be transferred to him. A friend of the investor entered an agreement with the company to sell his goods. The goods were sold but the sale monies were not given back to the customer, but kept by the company . The director offered instead a repayment plan to the customer. No sale monies were ever returned. At this point the investor realised all his suspicions must be real.

The only way forward was to legally reclaim what the investor and customer had lost. The director of the business however placed the company into liquidation. The director thought this would stop any claim for the investment monies or sale proceeds. Normally creditors of a company have to stand in line for anything a company in liquidation can offer them back. Usually there is no monies to offer creditors and they lose everything.

However with our experienced help and legal advices, the claimants have been able to pierce the corporate veil and go after the director personally for the monies owed. This is a very difficult argument to make before a High Court judge. With a lot of time, patience and explanation of what documents and witness evidence was needed, we issued a world wide freezing injunction on the director in his personal capacity and also a full claim for all the monies owed and invested. A High Court judge accepted the directors personal assets should be frozen world wide and judgement against the director in his personal capacity was also granted.

This has been a great relief to the investor and customer. Our ability to give them hope and strength to see this through has been appreciated. Rather than lose everything to an unscrupulous director, they have been able to stop this director from using the corporate structure from evading his liabilities.

We urge any potential investor to instruct lawyers from the beginning to do proper due diligence on who they are investing in and who with. When you are investing hundreds of thousands of pounds or millions of pounds, it is worth having lawyers do everything to advise and protect you before investment is made.

It will not always be possible to bring such an effective claim against a director who has been unscrupulous as detailed above and therefore we urge prevention is a better solution rather than reaction to a loss.

We do carry out due diligence work for overseas investors and would be happy to hear from you if you wish to have more information on your target investment.

We have listed commercial proceedings if you would like to know details of procedures for such litigation.

1, Appoint a solicitor -- provide your solicitor with timelines, documents and evidence of the case.

2, Draft and send the letters (pre-litigation) to defendant before making a claim.

3, Decide whether to initiate court proceedings (Issue the Claim), aslo considering whether it needs to make special applications before litigation, such as property freezing orders and property disclosure orders etc.

4, Prepare the prosecution file including claim application form, civil lawsuit (Particulars of Claim)

5, First appearance in court and prepare documents for court hearing.

6, Final Hearing and Judgment

If you do find yourself in a similar situation with an investment you have made as exampled above, please do contact us and we shall be happy to help.