If you are owed money by somebody you should visit a solicitor for legal advice to see if there are any ways of getting the money back. A solicitor will be able to advise on a number of options depending on your situation and the circumstances of the individual or company that owes the money.
The first port of call for any creditor should be to talk to the debtor with a view to agreeing a repayment plan. If talking to the debtor is unfruitful, a creditor can write a letter to the debtor outlining the following details:
- the holder of the debt
- the amount of the debt
- the purpose of the debt
- previous steps taken to recover the debt
- steps that will be taken to recover the debt
- a date by which payment of the debt is expected (a minimum of seven days)
- a request for any disputed issues to be put in writing
The mediation process employs a ‘referee-like’ figure in a dispute. A mediator is an impartial person trained in handling difficult discussions between the parties.
Mediation can be chargeable, however it is often less expensive than enlisting the services of a solicitor and bringing an action before the court. It is faster and less formal than litigation and participants report that it is also less stressful than attending court.
Mediation fees are structured on a ‘sliding scale’ – based on the size of the debt owed by an individual or company that owes the money.
The court takes the view that the parties to a dispute should attempt to resolve their differences through negotiation or mediation before seeking redress through the courts.
If mediation is unsuccessful, the matter can still be taken to court.
The most common method a solicitor will suggest to get money owed to you will be to obtain a court judgment against the individual or company that owes the money (the debtor).
In order to do this you will have to issue a claim in a county court detailing the money owed.
Nowadays, people can issue claims over the internet on ‘money claim online’.
Money claim online
Money claim online has been introduced due to the number of people that were owed money and intending to use the county court system to try to recoup it.
The courts became so busy dealing exclusively with money claims that it was felt a new way of tackling the issue needed to be introduced.
Money claim online is still the same principle as issuing in a county court; in fact, all claims on money claims online are issued out of Northampton county court.
The idea behind this is that there were so many claims for money owed that were not defended that there needed to be a more efficient system.
Money claim online, therefore, allows the creditor to obtain a judgment against the debtor for the amount owed if they fail to file a defence.
If a defence is filed then there will still need to be a hearing, in which case the claim will be likely transferred from Northampton county court to the local court of the debtor.
The reason a solicitor will advise trying to obtain a judgment for the amount owed is the fact that, once you have the judgement, you have clear proof that the money is owed and you can take enforcement proceedings.
It should be noted that enforcement proceedings are very different from obtaining the judgment and this is where many creditors make errors.
A good solicitor will advise you immediately that there is no point trying to go to the legal cost of enforcing a judgment if the debtor does not have the means to pay; you will simply be throwing good money after bad.
Methods of enforcing the judgment (actually getting the money owed) include an attachment of earnings order, a charging order and petitioning for bankruptcy.
An attachment of earnings order requires a percentage of the debt (as much as a judge deems affordable) to automatically come out of the debtor’s wage packet every month to pay back the creditor. Naturally, to enforce via this method the debtor must be in employment.
A charging order places a charge over the debtor’s property as security for the debt owed.
In order to petition for bankruptcy you will have to issue a statutory demand and therefore the debtor must owe at least £750.
Again a solicitor should advise what is the best method of enforcement for your circumstances depending on the income and assets of the debtor.