Terms and Conditions act as the backbone of your agreements and you should ensure they lay out your demands effectively. Solid Terms and Conditions that you keep consistent can save your bacon if debt recovery becomes necessary!
“If you are a business with ambitions, make sure you nail down your Terms and Conditions.”
DOs and DON’Ts for Ts and Cs
- Do have a look at the standard Terms and Conditions at www.simply-docs.co.uk. These can be used as a template.
- Do ensure you get your Terms thoroughly checked by a solicitor if you choose to copy someone else’s or use standard Terms from a website.
- Do use recognised Terms. Your respective trade association can often provide these and they fall in line with the laws of the country you are based in. This will aid consistency and assist resolution in the event of any dispute.
- Do ensure that any retention of title clause is included if you are supplying goods. This means that the goods remain property of the seller until the buyer fulfills full payment. It also means the goods can be repossessed by the seller if the buyer falls into bankruptcy.
- Do consider obtaining a minimum of 2 trade references in addition to your Terms. These are useful statements from other companies that you have existing business or credit with.
- Don’t do business with notes on the back of cigarette packets or practise IOU’s! – Ensure your contracts and agreements are properly and professionally laid out, with full Terms and Conditions clearly accessible from the outset.
- Don’t forget to mention, if you are supplying goods by delivery you will only accept the delivery receipt signature of an authorised director or employee of the company. Do state that your goods cannot be signed for by anyone who isn’t previously agreed by both parties and ensure everyone is aware of this.
- Don’t forget to include any contractual interest which becomes payable should a customer pay late. A penalty clause for customers who miss or fail to make a payment can also be included; this can cover any extra costs that the missed or tardy payment has incurred to you. A penalty clause will also encourage customers to make prompt payment in future.
Jack Russell is an accredited member of the following Professional Organisations; Cumbria, Macclesfield, Lancaster and London Chambers of Commerce. The Association of Credit Professionals and the Federation of Small Businesses. Such organisations ensure we always have access to quality advice and support and enable our voice to be heard by local councils and the Government. They also provide regular networking events which we always attend. Come and join us any many other businesses at the next Chamber of Commerce networking event to see what it could do for your business. Our networking schedule can be found here; www.debtcollect.co.uk/2012/06/jack-russell-networking-schedule-summerautumn-2012/
- County Court action generally covers outstanding invoices, return of goods, breach of contract and landlord/tenancy claims.
- If you are considering suing, ensure you comply with the pre-action protocols, some sectors have their own specific protocol for example the Construction and Engineering sector.
- The small claims court now covers anything up to £5k and is generally a fairly straightforward procedure.
“They promise you this, they promise you that
It’s just about time to sue the rat.”
-Kerry Bland, MD, Jack Russell Debt Collection & Legal Process Servers.
- Don’t forget you are entitled to claim statutory interest on late or missed payments at 8% per annum or contractual interest as per your terms.
- Ensure you pay the right court fee for the amount being chased. These costs can be recovered in the event of a successful claim.
- If the debtor is ignoring your contact, a County Court Judgment can be obtained in default.
- If the debt is disputed, the matter is generally transferred to the debtor’s home court.
- Mediation. This now applies as an alternative dispute resolution procedure.
- Once you have your County Court Judgment registered and your debtor blacklisted, you have many Enforcement Order options if you still don’t receive payment.
- If they are in employment, you know where the debtor lives and you have details of where the debtor is working you can enforce an Attachment of Earnings Order. This Order works to deduct instalments of what you are owed from the debtor’s monthly wage. However if your debtor moves jobs this can make things difficult as you will have to start the enforcement process again.
- Third Party Orders allow you to collect money directly from the debtor’s bank account. A third party is an individual or company that holds money for the debtor, typically a bank or building society. However this Order is only effective on the day that it is served so you will only receive payment if the debtor has money in their account on that day.
- An Order for Financial Questioning is useful if little is known about the debtor and their assets. The debtor or a Director of the debtor’s company is served an order to attend court at a certain time on a certain date to give details under oath about their finances and assets. If the defendant fails to turn up they can be threatened with prison although this threat is rarely followed through.
“This is the stage that no-one forgets.
Well would you if someone had removed your assets!”
– Kerry Bland.
- To serve a Charging Order the debtor needs to have some equity in a property. This can be tricky as it is difficult to force a sale and you could be waiting a long time before you see any payment.
- County Court Bailiffs can be instructed to seize goods to the value of the debt plus costs. County Court Bailiffs are Civil Servants and get paid the same amount regardless of success so most creditors do not find them as effective as other types of Bailiff such as High Court Sheriffs. High Court Sheriffs will deal with debts of £600 or over. They will transfer the debt to the High Court for you and obtain then execute a Writ (a formal written Order) suited to your needs. The Sheriffs are allowed to add fees to the debt, which the debtor will have to pay in addition.
- As a last resort and only where it is known that the debtor or debtor company do have the means to pay, you can issue a Bankruptcy or Winding Up Petition. Bankruptcy is for individuals and Winding Up is for companies. This can be costly as it is essentially the first steps in liquidating a company or declaring an individual as Bankrupt. Both of these procedures are very serious.
Did you know we also offer process serving? Get in touch if you have any legal documents that you require serving. We work nationwide and are able to serve documents on the same day in some cases. Excellent rates are available.
Jack Russell attended the Macclesfield Chamber of Commerce Summer Networking event and BBQ at the Bridge Hotel in Prestbury on the 19th July. A lovely evening was had by all with great weather, food from the barbeque and many networking opportunities. The next event we will be attending is the Bowdon Business Club Network and BBQ on the evening of 23rd August, we hope to see you there!
Q. What are the first steps in debt recovery?
A. Firstly, we gather as much information about the debtor as possible. We ask the client for details of the debt and debtor and any documents such as invoices, statements of account and CCJ’s (if applicable.) We will also carry out Company Searches or Land Registry Searches in the case of property disputes. Once we have all the information we need, we can prepare and serve the Final Demands or the Statutory Demands.
Q. What if my debtor ignores these Demands?
A. Quite often, the debtor responds quickly to Demands. However, if they don’t we proceed with follow up action. In the case of Final Demands we perform telephone follow up calls and then doorstep collections. In the case of ignored Statutory Demands we can then issue a Winding Up or Bankruptcy Petition.
Q. That sounds scary, is it?
A. A Winding Up or Bankruptcy Petition is very serious and generally something you want to avoid for your business. This is why we find this gets such good collection results and delivers the money you are owed back to you as quickly as possible.
Q. Ok, what if my debtor is served a Final Demand and doesn’t respond to telephone follow ups/doorstep collections?
A. In that case we proceed with County Court Action, sometimes the treat of a CCJ against your name is enough to resolve the debt. If not, the debt will go to a court hearing and then a Judgment will be enforced.