New debt recovery rules to come into force
A new Pre-Action Debt Protocol has recently been published by the Ministry of Justice and will come into force on the 1st October 2017. From this date onwards, any business chasing a debt from an individual must comply with the new protocol before starting court proceedings.
The protocol's aim is to encourage early communication and exchange of information by the parties to try and resolve the matter without the need to issue Court proceedings.
The protocol applies where a business is claiming a debt from an individual (which includes a sole trader), but does not apply to business to business debts.
It consists of a two stage process; an initial letter of claim by the creditor which, amongst other things contains details of the debt and any agreement which gives rise to it, and an up to date statement of account.
The debtor is then required to complete the Reply Form and Financial Statement Form and return it to the creditor. The debtor can also make a request for copies of relevant documents.
The principal of the new protocol is to provide debtors with sufficient information to enable them to obtain advice prior to court proceedings being started and if possible to resolve the dispute quickly and cost effectively.
At Samuels Solicitors in Barnstaple, Devon, we have a long history of assisting businesses and individuals with debt recovery services. We will send a debt demand letter to your debtor for free, and you only need to pay us if the debt is paid.
Contact us if you would like to take advantage of our free debt recovery letter service, or if you need advice about how to deal with a creditor who is chasing you.