How do I get back owed money?

How do I get back owed money?

Sometimes you may find yourself in a position where someone owes you money and they have not paid you back.

Below are some tips on what you can do to recover the owed money.

Informal contact

The first port of call for any creditor owed money should be to talk to the debtor with a view to agreeing a repayment plan for any owed money.

If talking to the debtor does not work, you could write a letter to the debtor outlining the following details:

  • the holder of the debt
  • the amount of owed money associated with 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

Mediation services

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.

A mediator may charge you, however it is often less expensive than enlisting the services of a solicitor and bringing an action before the court to get back the money owed . 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 amount of money 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.

Court judgment

The most common method a solicitor will suggest to get owed money returned to you will be to obtain a court judgment against the individual or company that owes said money (the debtor).

In order to do this you will have to issue a claim in a county court detailing the owed money.

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.

Money claim online works the way as a county court. Money claim online allows the creditor to obtain a judgment against the debtor for the owed money 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 the county court to the local court of the debtor.

Enforcement proceedings

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.

If you require legal help recovering owed money you can use our directory to find a solicitor near you here.

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