Late payments are unfortunately common in business.

There may have been a disagreement, your client or customer may be facing financial difficulties, or they may simply be reluctant to pay what is owed.

Regardless of the reason, late payments and unpaid debts are problematic. They have a direct impact on cash flow and impede the growth of your business.  It is therefore important to recover debts promptly and efficiently. 

What can you do when a client refuses to pay?

There are three main steps in the commercial debt recovery process:

  • Pre-litigation action

    Issuing a simple reminder or negotiating with your debtor can often achieve an outcome that is commercially acceptable to you.  If informal efforts fail, a formal demand letter outlining the debt and setting a clear deadline can be enough to encourage payment.
  • Legal proceedings

If the debtor ignores the demand, legal proceedings may be necessary. This may involve filing a claim in the County Court or for larger sums in a higher court.

  • Enforcement

Once a court judgment is obtained there are various enforcement options available to secure payment, including bailiffs and freezing orders.

Protect your rights: interest and compensation

Under UK law, you may be entitled to claim statutory interest on unpaid commercial debts, as well as compensation for debt recovery costs. These entitlements can add significantly to the amount you recover.

It is important to seek appropriate advice and involving a solicitor early can make all the difference. It gives you clarity on your options and lets your debtors know you are serious about getting paid. If you would like to speak to us about unpaid debts, our team is here to offer expert advice and support.

To discuss commercial debt recovery further, please contact our disputes team on 01245 228101 or emersonj@gepp.co.uk.