Step Two: Legal Action
If upon sending a letter before action to your debtor you do not receive an acceptable reply, the next step is to take legal action by issuing court proceedings at the County Court. At this point the debtor will receive a court form from the court demanding them to pay the debt together with interest and costs within 14 days. If it is a commercial debt, the Late Payment of Commercial Debts (Interest) Act 1998 will also apply. This will result in the addition of a fixed sum compensation between £40 - £100 per invoice being added to the value of the claim.
Bankruptcy - An alternative to the above, if the debtor is an individual you can apply for bankruptcy proceedings to make the debtor bankrupt. This will affect their ability to obtain credit or become a company director amongst other things.
Insolvency - A further alternative to the above is to commence insolvency proceedings such as winding up petitions against businesses.
