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2. Know Your Debtor

Before you initiate debt recovery proceedings against individual or company debtors, it is important that you establish whether or not the debtor is worth pursuing; they may have defaulted on their debts due to a lack of money or physical assets.

There are various ways of investigating whether the debtor has any money or physical assets, whilst at the same time discovering whether they are currently experiencing financial problems or have significant debts.

Typically, debtors can be separated into two distinct groups: company debtors and individual debtors. Once you have established whether your debtor is an individual debtor, for instance a sole trader, or a company debtor (e.g. limited companies, partnerships), the experienced debt recovery solicitors at Farleys will be able to take the appropriate steps to discover the extent of their assets.

Individual Debtors

If your debtor is an individual debtor or sole trader, their assets may include equity in a residential home or commercial property, or any other physical assets with a connection to the business.

Farleys’ debt recovery team recommend you take the following steps in order to ascertain the assets of your debtor:

  • For a small fee, undertake a search of the Land Registry in order to determine whether or not your debtor is the registered owner of any land or buildings. This search will also reveal any outstanding mortgages on the property of your debtor.
  • Investigate whether the individual is currently subject to an IVA (Individual Voluntary Arrangement) with his or her creditors, by performing a search of the Insolvency Register at the Insolvency Service website.
  • Investigate whether the individual or sole trader is currently subject to bankruptcy proceedings, by performing a search of the London Gazette.
  • Perform a search of the Trust Registry Online to discover whether you debtor has a County Court Judgement (CCJ) registered against their name, or has outstanding fines with the court.

Company Debtors

If your debtor is a limited company or partnership, a simple search ofCompanies House will reveal if they are currently subject to insolvency proceedings. Farleys’ debt recovery solicitors recommend that you use some or all of the following investigation techniques, in order to ascertain whether or not your debtor has sufficient assets to repay their debts to you or your company:

  • Telephone the Central Registry for Winding Up Petitions on 0906 754 0043 (Please note, this is a premium rate line) to see if a winding up petition has been issued against the company recently. If winding up proceedings have been initiated by another creditor, you will be able to join said proceedings / lodge your interest.
  • A search at Companies House can also reveal if there are any legal charges or debentures registered against the company in favour of a bank or other financial institution.
  • For a small fee, other abbreviated accounts information can be downloaded in relation to the company.
  • A search can be undertaken at the Land Registry in order to determine whether the company is the owner of any land or buildings. The search will also reveal if there is a mortgage or charge over the property.
  • It can also be useful to keep your ears open for any suggestion that your debtor is struggling or in any financial difficulty.

Debt Recovery Solicitors at Farleys

Alternatively, the debt recovery team at Farleys can handle the entire process on your behalf, performing the investigation into your debtor’s assets and providing you with regular updates on the progress of your case.

Once you are aware of your debtor’s financial situation, your next step will be deciding on an appropriate method of debt recovery.

For more information, or to secure legal advice from an experienced solicitor, call Farleys today on 0125 460 6090 or e-mail us.

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