A bailiff is an individual equipped with legal powers to visit a debtor’s home or business premises and ask for repayment of the debt. If payment is not made, they have powers to take items belonging to the debtor from the premises.
Normally, bailiffs must give you seven days’ notice before they arrive at your premises. However, this is not the case if they have an order from the court providing otherwise.
You can and should ask for a bailiff’s identity and evidence of their authority when they visit your business premises.
You have several options available to you when a bailiff visits your business premises. You can:
Agree to pay the debt;
Propose a payment plan (the bailiff is not obliged to agree to this);
Let the bailiff into your premises (they will probably seize assets); or
Keep your doors closed and refuse the bailiff access (bailiffs could still seize assets which are outside of the property and the costs involved could be increased).
For most debts, bailiffs cannot force entry into your businesses premises if they have not been in previously. There are exceptions to this. For example, where the bailiff has permission from the court for entry or where High Court Enforcement Officers are involved. Where a bailiff has previously entered the premises and drawn up a list of goods they are able to force entry.
When bailiffs are collecting a debt from a limited company, the only items that they can seize are those that belong to the company. This is because a limited company is a separate legal identity to its directors and shareholders.
However, where the director has given a personal guarantee for the company’s borrowing, the bailiff can take action against the director personally.
Unlike with personal debts, there is not a ‘tools of the trade’ exception. This means that any items owned by the business may be seized, even if they are needed for the running of the business.
As a sole trader or a partner, you will probably own or partly own assets of your business. This means that bailiffs can visit your business premises and seize items you personally own. In addition, bailiffs can also visit your home and seize personal items there.
In practice, bailiffs will seize assets owned by the partnership first, before taking an individual partner’s personal assets.
A limited liability partnership enjoys the separate legal personality that a limited company does. The debt belongs to the LLP, and not the partners, and so the personal assets of a partner cannot be seized.
It is important to get advice on the options available to you if your business is struggling to pay its debts.
If you would like advice in relation to your business’ debts, please get in touch with Farleys’ insolvency solicitors on 0333 331 4598.Request A Call Back