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How Will the Coronavirus Affect Debt Recovery?

View profile for Catherine Rickett
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With the current situation taking the country into a lockdown, we are being asked by our clients if we can still pursue debtors on their behalf. The easy answer to the question is yes, however careful thought and consideration should be given to the approach being taken.

In this unprecedented situation, we are all getting used to the new way of life. Some businesses have been forced to close, and the self-employed people (at the time of writing) are not entitled to any recompense for lost earnings during the lockdown (though this may change).

Solicitor’s Demand Letters (SDLs) and Pre-action letters

In terms of debt collection, we are still able to help our clients in several ways. We are still able to send out SDLs and Pre-Action letters during this time, and we are still able to issue court proceedings using the Money Claims Online system. Careful consideration should be given to the address where the letter, or proceedings are being served.

If it is a business address, and the business has temporarily stopped trading due to the outbreak, then it would be wise to give the debtor more time to receive and respond to the correspondence or proceedings. Each case should be considered on its own merits in this regard.

The Courts

HM Courts and Tribunal Services have confirmed that there may be a need to adjourn hearings to a later date if there is a lack of judicial availability. Where there is availability, many hearings are taking place via video link, to minimise disruption to the administration of justice. The situation in the courts is changing daily, and we are in constant communication with the service.

Payment plans

In these times, where many will have more time on their hands, it could be a good opportunity to try our telephone collection service.

Getting on the phone and talking to debtors is something we are very good at. Where a debtor is genuinely facing a period of hardship, a payment plan may be a better idea, and where we are unable to effect service of a pre-action letter or proceedings due to a business being closed, we may be able to extract payment that way.

Our team members can take payments securely over the telephone and our procedures ensure data security at all times.

Enforcement of judgments

As visits by Enforcement Agents do not meet the Government’s definition of an “essential service”, our agents have ceased all visits to debtors during this time.

We have a duty to direct vulnerable debtors to seek alternative support to help them pay the money they owe.

Again, in certain circumstances, it may be better to take payments and set up arrangements where possible. It may also be necessary to consider alternative methods of enforcement, and as always, information is key when advising our clients, so the more we know, the better.

It’s simple to instruct us once you are registered as a client with our online matter tracker. You can upload instructions, check the progress of your matters and request a call back at any time of day or night, meaning that we are accessible when many legal advisers may not be.