Collecting your Debts – all change

Wake Smith Solicitors 19 September 2017

Wake Smith debt recovery manager Louisa Kearns looks at forthcoming changes to the way in which debts are collected.

The Pre-Action Protocol for Debt Claims (“Protocol”) comes into force on 1st October 2017.  It applies to any business claiming payment of a debt from an individual (including a sole trader).  It does not apply where a business is claiming payment of a debt from another business (except a sole trader).

The aims of the Protocol are to encourage early engagement and communication between the parties, enable parties to resolve the matter without the need to start Court proceedings, encourage parties to act in a reasonable and proportionate manner in all dealings with one another and to support the efficient management of proceedings that cannot be avoided.

Louisa said: “The Protocol requires us to send a letter of claim to the debtor, as before, with information about the amount of the debt, whether interest or other charges are continuing, how the debt arose and information about how the debt can be paid.  We also have to provide an up to date statement of account for the debt together with an Information Sheet, Reply Form and a Financial Statement Form.”

The letter must be sent by post unless the debtor has made an explicit request that it should not be sent by post and has provided alternative contact details.  The debtor must respond to the letter of claim within 30 days.  If the debtor does not reply within 30 days you may then start court proceedings provided you have given 14 days’ notice of this.

The debtor should respond using the Reply Form which we have to provide.  The Reply Form asks the debtor whether they agree they owe the debt, some of the debt or dispute the debt; it asks for details of how they will pay the debt and whether they intend to take debt advice. The debtor can ask for copies of documents and can provide documents considered relevant.

minimum period of 30 days must then pass from the date the debtor’s Reply Form is received or from when documents are provided (whichever is the later) during which time the parties should attempt to resolve the issue or agree payments terms.   This time should be used by the debtor to take debt advice.  If the debtor makes instalment proposals and these are rejected, reasons must be given in writing.  This time should also be used to undertake Alternative Dispute Resolution either in the form of discussions or negotiations or through formal mediation.

If after the 30 day period no agreement has been reached with the debtor we must then give 14 days’ notice of intention to issue court proceedings.

Louisa added “Where parties do reach agreement concerning repayment of the debt, court proceedings should not be started while ever the debtor complies.  If you want to start court proceedings at a later date you must send an up dated Letter of Claim and comply afresh with the Protocol.”

Failure to comply with the Protocol could result in sanctions against the defaulting party.

Click here for an overview of Pre-Action Protocol for Debt Claims.

For further information contact Louisa Kearns on 0114 266 6660 or at [email protected]

Tags

Archive

March 20247February 20242January 20248December 20236November 20232October 20235September 20232August 20234July 20232June 20235May 20238March 20234February 20235January 20233December 20225November 20224October 20224September 20223August 20221June 20221May 20227April 20223March 20223February 20223January 20224December 20214November 20213October 20215September 20216August 20212July 202111June 20218May 20216April 20212March 20218February 20218January 20219December 20208November 202013October 20209September 20208August 20203July 20208June 202016May 202013April 20209March 202016February 20209January 202011December 20199November 20199October 201911September 20195August 20194July 20196May 20198April 20196March 20193February 20195January 20194December 20186November 20185October 20182September 20185August 20184July 20189June 20184May 201810April 20185March 20184February 20184January 20183December 20175November 20178October 20177September 20179August 20175July 20176June 201710May 20176April 20178March 201711February 20176January 201712December 20169November 20167October 201610September 201610August 20166July 20167June 20163May 20162April 20166March 20162February 20164January 20165December 20153November 20155October 20156September 20156August 20157July 20157June 20157May 20156April 20159March 20156February 201510January 20156December 20145November 20144October 20142September 20143May 20144March 20146February 20144January 20142December 20132November 20133September 20134July 20132June 20132May 20133April 20131March 20133February 20133January 20136December 20121November 20123October 20122August 20122July 20128June 20123April 20123March 20121January 20124December 20112November 20111October 20112September 20113August 20113July 20117June 20119May 20117April 20115March 20119February 20118January 20111December 20101October 20102September 20102August 20103July 20106June 20101May 20102April 20106March 20102February 20103January 20102December 20095November 20092October 20092September 20092August 20091July 20095June 20095May 20093April 20093March 20093February 20091January 20092November 20082October 20082September 20081August 20083July 20081January 20082

Featured Articles

Contact us