What are the rules of debt recovery if any for businesses?

handyman · 29-09-2009, 11:24

Hi,

The company I work for is owed money by another company A. The amount is not in question but company A have been fobbing us off for ages and we have assigned this debt to our debt recovery firm.

Company A is disputing the collection costs as it does not mention this in our terms and conditions.

As I understand it they will find it very hard to dispute as they are something like 90 days over on a 30 day line of credit and have had the services we charged for. If it went to court my thoughts were that costs of debt recovery would be taken into account.

Are they just trying to delay further or do they have legitimate grounds for complaint?

Mal · 29-09-2009, 12:17

An idea prior to sending it to the debt recovery firm, was to issue a letter stating fully what would happen if they did not pay. That way, they could not complain that they were not notified.

Whether this is a reason to get out of it now, I cannot say though, sorry

Delta Whiskey · 29-09-2009, 14:09

I would have thought that as Company A haven't abided by the T & C's themselves by not paying within the allotted time, they can't complain about the extra charge.

Flyboy · 29-09-2009, 15:04

Under normal circumstances, Delta, the variations would be separate issues.

The thing to do would be to re-issue the debt. I.E., send out a new invoice from today, setting out the terms of business, including the potential costs of recovering moneys owed, along with any any interest to be added (usually up to four per cent above base rate). Give them the usual thirty days and if they don't pay, refer it back to the debt collectors. There are court based remedies to this situation, but it will take longer and be more costly than re-issuing.