An alternative to a Letter Before Action is a Late Payment Demand that allows you to claim Interest and Compensation under the Late Payment of Commercial Debts (Interest) Act.
We understand the importance of commercial debt recovery to any business, large or small and appreciate the realities that very few businesses can claim that their bills are always settled within reasonable time limits.
The importance of an efficient system of financial control, for good debt management means that many debts can be avoided altogether. Our staff are well-trained and experienced in debt collection. A system of computerised debt collection enables us to monitor pecuniary instalments into clients’ accounts, and the in-house backup of court proceedings helps limit defaults in payments.
In an atmosphere where it is increasingly vital to maintain good customer relations, it is an attractive option to transfer credit control out of the hands of the creditor and into the hands of a firm whose quality policy for debt collection is recognised and whose expertise in insolvency means that where necessary, legal enforcement is part of the service
Late Payment Demands
Are your customers paying late? You may be able to claim significant compensation and interest!
What is is?
A Late Payment Demand (LPD) is a Letter Before Action claiming Late Payment interest and compensation.
LPDs are only available via our Web Site.
Why use it?
LPDs are a highly cost effective way of getting a contribution to your collection costs or even covering them completely. You can claim interest at 8% over Bank of England Base Rate and compensation of £40 – £100 for each unpaid invoice.
What does it cost?
Unlike our competitors, we don’t differentiate between LBA and LPD pricing,
When can you use it?
- You can claim Late Payment Interest and Compensation if:
- You have supplied goods and services
- Your buyer bought for business purposes
- The contract is not a consumer credit agreement
- The contract does not contain a provision for interest on overdue invoices (or any other substantial remedy for non payment)
- The order was placed after 6/8/02
When can’t you use it?
If your contract with a debtor contains a provision for interest. However, you can still claim contractual interest or contractual compensation in your Letter before Action – please tell us if you require this.
Judgment
Judgment will:
- Affect the debtor’s credit rating
- Remain on the public record for 6 years (unless paid within 28 days)
- Enable immediate enforcement
Enforcement options
Once you have judgment you have these options either through The Enforcement of Judgements Office in Northern Ireland or by way of Insolvency Proceedings:
- Get the debtor to tell you more about his financial position
- Get a debt due to the debtor paid to you instead
- Take a charge over the debtor’s home, office etc
- Have the debt paid out of the debtor’s earnings – Attachment of Earnings Order
- Start Insolvency proceedings – Bankruptcy
- Credit checks before enforcing?
Before incurring the cost of enforcement you may want to check the debtor’s financial position again, as far as you can. This would involve getting a credit report and checking that there are no current winding up petitions.
Defended Claims
Statistically, only a small minority of all cases passed to Donnelly Neary & Donnelly actually become defended. When they do, you need commercial and cost-effective advice!
What are your choices?
- Fixed Price Opinion – get advice from our solicitors on whether it is worth fighting the case at all. The cost is £200 or £400 depending upon the size and complexity of the dispute.
- Negotiate a settlement via Donnelly Neary & Donnelly – we have extensive experience in bringing cases to a conclusion quickly and successfully
- If the claim is for less than £5000 and the defence is straightforward, use the Donnelly Neary & Donnelly Small Defended Claims service
- Mediation or Alternative Dispute Resolution (ADR) may be appropriate
- Our lawyers will advise you on the best way to handle the case, and in particular whether summary judgment is feasible. Detailed cost estimates will be provided, together with updated cost figures as the case proceeds
A powerful alternative to issuing a Claim is to start insolvency proceedings. You can only do this for debts (including contractual interest and Late Payment compensation) of £750 or more. To examine the pros and cons of Claims or Insolvency click here.
How to start
Insolvency proceedings are started against:
- a company by presenting a winding up petition
- an individual by presenting a bankruptcy petition
- a firm by presenting a winding up petition against the firm and/or bankruptcy petitions against the partners
Using a Letter
Although it is possible to serve a statutory demand on a company before presenting a winding up petition, this is generally unnecessary, but may be used tactically. It is often more effective to send a seven-day letter demanding payment together with a draft winding-up petition to show that you are serious.
