How do you deal with small unpaid debts?

[Tim Barlow]

We have someone who owes us around £250 but refusing to pay.

With such a small amount forcing payment seems difficult. Even a see-what- happens lawyer letter will take away good portion. A small claims court approach is a lot of hassle for the amount of return. So what options are there for taking such a debt beyond increasingly stern reminders?

 

[Scottish Business Owner]

Hi Tim,

You could get an LBA send from Yuill & Kyle which costs £3.00 which isn't a great deal of money and I have had a little success with this in the past.

Yuill & Kyle : debt lawyers scotland debt collection bad debt

It is actually a very good site for help on chasing debt etc

I do have quite a bit of experience in collecting debts myslef and do it on a regular basis. I would be more than happy to assist if you drop me some more details via PM.

 

[stuarty]

In addition to 's advice - Sherrif Officers

 

[Scottish Business Owner]

In addition to 's advice - Sherrif Officers

That would be a good route for a larger type debt and if the Sheriff Officer was going in with a Statutory Demand. Given the level of debt you cant serve that type of document.

The only recourse would be a small claims action and while you would get some help from the courts filling in the forrms it would still cost £50-£60 in fees and can take anything up to six months to actually get a judgement. You then have to serve it and enforce which would erode the £250 debt no problem.

 

[stuarty]

Given the level of debt you cant serve that type of document.

I'm no legal expert by any means but I'm fairly sure there's no limit. SO's pursue for silly sums like £40. We've had £100, £200 debts successfully recovered. We've used the SO's in Perth to great effect. We've used debt collection and factoring companies in the past and these were marginally successful. We now always opt for the SO route as it cuts out the admin and middle men. From what I remember they add a recovery fee on top of the debt value. It's been our most successful way of dealing with debt since.

Tim...I'm not sure of how the debt was accrued but have you thought about money up front with your clients?

 

[Scottish Business Owner]

You are correct to a point. SO's will attend and serve for any amount but with amounts less than £1500.00 you will require a judgement from the court as far as i'm aware. Judgements can take a few months to get through the courts so it's not a very time efficient way of collecting debt although in some cases it's unavoidable.

 

[Tim Barlow]

Tim...I'm not sure of how the debt was accrued but have you thought about money up front with your clients?

Yes and we do but it isn't practical in all situations. We run a pretty tight ship on credit control these days which is why the debt is so small. The way I ran things before I learned the hard way, this debt could have been 20 times the size.

Interested to here more about the sheriff option.

 

[amestaper]

Try the Statutory Interest Calculator website.

I considered using this online calculation tool only a matter of weeks ago with a slow paying client. Apparently you do have a legal right to charge interest on late and unpaid debts.

 

[alanbold]

Try a baseball bat to the head, I find it tends to work.....only joking