Debt Recovery – the new law for businesses
New debt recovery law came into effect on 1st October 2017 so businesses need to be complying with it already. It applies to all debts owed to a business (including a sole trader) by an individual (including a sole trader).
The new rules set out various new steps the parties are expected to take before court proceedings can be started. Failure by a party to follow the new law could lead to a claim being put on hold, limit the amount of interest recoverable and/or result in the creditor having to pay a costs penalty.
The new rules specify that a creditor must send lengthy letter of claim to debtor containing various mandatory information. In addition several prescribed documents must also be sent with the letter of claim. The creditor must wait up to 30 days for the debtor to respond. What happens next depends upon what is in the debtor’s response but could delay a creditor’s ability to issue court proceedings by at least a further 6 weeks on top.
Because compliance with the new law will cause significant delay in commencing proceedings it is important that all businesses review their debt management procedures to try and keep delay to a minimum but still ensuring compliance with the protocol.
If you would like further information on this, please do not hesitate to contact Bendles debt recovery team.