Debt recovery: Pursuing unpaid invoices

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Simple steps in vetting customers prior to commencing a business relationship can quite literally pay off, but we will have a look at the steps available if an invoice remains unpaid.

A ‘letter before action’ giving the defendant a period of time to pay is customary. It should be made clear that if the debtor does not pay, legal action will ensue which will ultimately increase the debt with interest and costs.

If the debt is over £750 insolvency proceedings can be initiated against the debtor. Firstly, a demand for payment is sent and failure to pay can result a company being wound up.

Alternatively, if the debtor has potential grounds to dispute the debt, then a claim can be issued in the county court. If the debtor does not respond a judgment can be obtained relatively quickly.