Bad debt at year end
by David Carter on 05 May 2010
With the financial year now over for many companies, there is much work for the finance department, who will be making decisions about which bad debts to write off and which to pursue.
Before writing off a bad debt, I would suggest that the company carefully consider action, either through the County or High Court. Once you have the judgment or if there is already a judgment in place, High Court enforcement might be the most effective way to get your money back, as High Court Enforcement Officers (HCEO) have more powers than County Court Bailiffs.
If the debtor company is still in business, or in the case of a sole trader, not bankrupt, then they might be worth pursuing. You can check if they are still trading at Companies House or the Insolvency Register. You can also check whether they have other judgments against them, before deciding on action.
The cost of enforcement via the High Court is low - £60 to transfer your judgment to the High Court for a Writ of Fieri Facias. If unsuccessful, the only other cost is a £60 abortive fee per address visited. Should enforcement be successful, court fees and enforcement costs are added to the amount paid by the debtor.
You can transfer any judgment worth £600 and over to the High Court. Debts of over £5,000 must be enforced by an HCEO, and those below £600 by County Court Bailiffs.
One final point to consider, even if you have already written off a debt, you may still be able to recover the money. You may enforce a judgment up to six years old. If you do not have a judgment for the debt, you may still obtain one if the debt itself is no more than six years old.
So there may still be opportunity to successfully recover money you had given up on!
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Disclaimer: The statements and opinions expressed in this article are those of the author and do not necessarily reflect those of Sheriffs High Court Enforcement Ltd, trading as The Sheriffs Office. Sheriffs High Court Enforcement Ltd does not take any responsibility for the views of the author. The author will not be held responsible for any comments posted by visitors to this site. Please note that this article does not constitute legal advice. The author has used his best endeavours to make this article as accurate and complete as possible, but requests that the reader be aware that the law of England and Wales frequently changes. The author strongly advises the reader to take legal advice before embarking on any enforcement action.
