If it’s a corporate debtor you should;
* Obtain a company search and analyse the last filed accounts and check its insolvency status on the Companies House website. Notify any appointed insolvency practitioner of the debt to make a claim.
* If nothing is registered at Companies House, call the Companies Court to find out whether there is an outstanding petition against the company. If there is, you can obtain details of the petitioning creditor to find out how much they are owed. If that creditor withdraws, you can be substituted as petitioning creditor.
* Consider instructing an enquiry agent to look into the assets of your debtor (depending on the value of the debt).
* Do a search of the County Court Judgments Register. Clearly, if there are lots of judgments registered against your debtor it may not be worth your while pursuing the debt.
* Search the Land Registry to find out who owns any property that the company is trading from and try to ascertain whether there is any equity.
* Consider whether you know of any third party who owes your debtor money. You could obtain a debt order to get that third party to pay you instead of the debtor.
If your debtor is an individual, then most of the above still apply. You can search the insolvency register to find out if the debtor is bankrupt. You can also consider an “attachment of earnings” order, which means you’ll be paid direct from the debtor’s wages if he or she is in employment.
Once you have more information about the solvency and assets of your debtor, you can make a decision whether to issue proceedings against them. If they have no assets, then you may find it is better to write off the debt than spend more money trying to recover the debt.
You should then get legal advice on the most cost effective and appropriate process of recovery, whether that’s an insolvency process or a claim form to commence high court or county court proceedings.
Sarah McLennan is an associate in the London finance and restructuring practice at international law firm, Faegre & Benson LLP. She can be contacted at firstname.lastname@example.org or on +44(0)20 7450 4533.
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