If someone owes you money, what are your options?

If someone owes you money, there may be a variety of options available to you depending on who it is that owes you money and what kind of debt it is. It also may depend on how old the debt is.

Different kinds of debt

There are two main types of debt, regulated and unregulated.

Regulated debts

A regulated debt is a debt which is covered by the Consumer Credit Act. The following are some examples of a regulated debt:

  • Credit cards
  • Store cards
  • Store finance and ‘buy now pay later’ agreements
  • Payday loans
  • Personal loans
  • Hire purchase
  • Catalogues
  • Secured loans, although these will be unregulated if they’re with your mortgage company and taken out to make home improvements

The Consumer Credit Act sets out what creditors must do when they lend money and when they collect it. It also sets out the rights of people who borrow money. Only an agency with an FCA license can recover regulated debt and At Rutherford’s Bailiffs and Collection Services, we will soon be able to assist with this.  Just contact us if you’d like to know more.

only an agency with an FCA license can recover regulated debt and we will soon be able to assist with this

Unregulated debt

If you hear the term unregulated debt, it means the debt is not covered by the Consumer Credit Act. Unregulated debts include:

  • Mortgages
  • Debts to individuals, such as family or friends
  • Debts to unlicensed lenders or loan sharks
  • Household bills, including gas, electric and water
  • Debts to local or central Government, including council tax, benefit overpayments and taxes
  • Some credit union loans
  • Charge cards
  • Some types of business debt

At Rutherford’s we can help you to recover unregulated debts. There may be other types of unregulated debts in addition to those listed above and if you’re in doubt about what type of debt yours is, please get in touch so that we can advise you. Sometimes, it is not clear what type of it is and it may depend on the date of the debt and the amount borrowed.

How can you recover an unregulated debt?

Step 1 – Contact the debtor

Provided your debt is not already the subject of a County Court Judgement, if someone owes you money the first thing you should do is contact the debtor. If your debt is the subject of a County Court Judgement, scroll down to step number 4 below.

It may seem obvious, but you must contact the person or company who owes you money and tell them:

  • How much they owe
  • What it’s for
  • what you have already done to try to get the money

The more information and proof of the debt that you can provide, the better.  So, for example try and collate any documents such as any written agreement or emails, details of the actual people involved, all paper work including estimates, invoices, evidence of work done etc.

You should also inform the debtor:

  • The date by which you expect payment (at least seven days)
  • A request for the debtor to put in writing any issue or dispute they have with your statement
  • Details of the steps you’ll take if payment isn’t received.

Money and debt can be a very emotive subject, but it’s important to keep calm and avoid heated arguments.

Step 2 – Instruct a debt recovery agency

If you’re still haven’t been paid, you may wish to contact a debt recovery agency. Companies like us specialise in debt recovery but do check that the company you use is reputable. Most recovery agencies will charge either a fixed fee or take a percentage of the money they recover on your behalf.

The debt recovery agency will then contact the debtor on your behalf. They may or may not work with a solicitor to do so and they may or may not send a letter before action, depending on the particular circumstances of your case. Check with them first.

The good news is that very often, contact from a debt recovery agency is enough to get the debtor to pay up. But if the recovery agency is unable to collect the debt, they will probably contact you about taking the matter to court.

If you’d like to know more about this service, please get in touch for a free consultation.

Step 3 – Recovering your money through the courts

Some debt recovery agencies can manage this process for you, others will refer you to a solicitor at this stage. You can of course manage the court proceedings yourself, particularly if the debt is small and you make a claim in the Small Claims Court.

However, we always recommend you take professional advice before any action, so that you are fully aware of your options, your chances of success, what you need to do and whether there are any cost implications for you.

At Rutherford’s we have teamed up with a group of solicitors that for a fixed fee will review, prepare and submit the claim on your behalf giving you peace of mind that the claim has been submitted in the best possible way.

If the debt is less than £10,000 (£5,000 in Scotland and £3,000 in Northern Ireland) you can make your claim in the Small Claims Court. You will need to contact your local County Court or go online to do so. There is guidance on the Government website:  https://www.gov.uk/make-court-claim-for-money/court-fees

If the amount owed is more than £10,000 you will have to issue in the County Court or High Court and you should seek advice from a solicitor. Always remember that you may be prevented by law from claiming for older debts. Check with your legal team first.

Whichever course you follow, bear in mind that a claim though the courts could take months. You should consider your chances of success very carefully (there is no guarantee). Also bear in mind that if the debtor has no money, then even if you win, it may still be hard to recover your money. If you lose, you may have to pay the other side’s costs.

Step 4 – Enforcing a court order in order to get your money back

If you’ve taken your case to court and won, then with luck, the debtor will pay. A judgment debt has to be paid within a month of the date of judgment unless the court has made a specific order that it should be paid by instalments.

However, if they fail to do so, your next step will to ask the court to enforce the order. You will have to pay a court fee for this service.

There are different ways you can ask the court to help you recover your money and these include charging orders, attachment of earnings orders, winding up and bankruptcy proceedings. However, you will need to take professional advice before considering asking the court to do any of these. If you’d like us to recommend someone who can advise you, please contact us today.

If you’re owed between £600 and £5,000, you can ask the court to send an enforcement agent (formerly known as a bailiff) to collect the debt. Enforcement agents can visit the debtor’s property, to remove and sell goods to pay off a debt if necessary.

We may be able to help you with this as we partner with a High Court enforcement team who deal with any debts over £600.00 and not older than 6 years old with a County Court Judgement (CCJ).

Working with use if someone owes you money

The first thing we do when we work with you is to get a thorough understanding of your individual circumstances and your expectations.  We also provide a credit check on the person or business that owes you money before we act, just to make sure that there are enough assets in the company to continue.

You’ll also be given a personal login that will enable you to check the progress of your case on our portal 24/7.

We recover the debt in the best way possible for you and your business and as quickly as we can.  If we think you have no chance of recovering a debt, we will tell you straight.

We also keep in regular contact with the debtor in order to support them and payments made by them will be sent directly to you once cleared. We work on a 20% of the debt, no collect, no fee basis.

It can be stressful if someone owes you money, our aim is to help you recover your debt in the quickest way possible and with the least amount of hassle. We’re non-judgemental and always professional and treat each case the respect it deserves. Please contact us today if you’d like to know more.

This post is meant as a guide only. If in doubt, or if your situation is unusual, you should take professional advice.  If needed, contact us and we’ll recommend a suitable professional.