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When cash flow gets tough, resorting to legal action may be necessary to recover money from slow-paying customers. Or your firm could be subject to legal action if creditors become concerned about their unpaid debts.

HMRC have significantly increased their use of the law, and particularly their right of distraint, to extract funds from firms who may be in financial difficulty. It’s a powerful way of getting a response from debtors, but at the same time, it can put you out of business if HMRC get as far as seizing your commercial assets.

The County Court Judgement (CCJ) is more commonly used when one firm reaches the point of taking legal action against another. A more dramatic action is to apply for the winding up of a company.

Your options for recovering commercial debts

A robust credit control regime is probably the most cost-effective way of ensuring that most, if not all, of your customers pay within a reasonable time. If this is too onerous for you, it can be outsourced through an invoice factoring arrangement.

The solicitor’s letter is frequently the next stage, implying that legal action is imminent without actually initiating anything. For some debtors, this is enough to get them reaching for their cheque books or online banking systems.

If you’re required to take the next step, which usually involves a CCJ, it’s important to take legal advice and to consider the extra administration costs, not all of which can be recovered through the process.

Every day, the Business Recovery team talks to firms who are looking to solve the cash flow problems brought on by slow-paying customers. Our experts are available to give you cash flow advice, so why not call right now on 01451 832533?

Avoid being the subject of legal action

When a supplier or HMRC take action against you to recover debts, the impact can be extremely serious. Other creditors become aware of what’s going on and will also want their money back as soon as possible.

The action may be enough to spark insolvency proceedings, at which point the continued existence of your firm is called into question. If it’s running a viable business, that business may well continue in another form, potentially under different ownership. But the company through which it has been run could be wound up and the directors left with debts to settle.

Let Business Recovery help you to act now

The Business Recovery specialists have worked with hundreds of firms, finding them alternative methods of commercial finance which have allowed their businesses to grow and succeed.

If your firm is facing potential cash flow problems and you’re not sure where to turn, give us a call now on 01451 832533.

It won’t cost you anything to speak with our experts, as our fees are paid by the funders we work with.

By talking to our experts, you’ll discover finance options you had perhaps not previously considered, and solutions that you did not realise were available. Call now to find out more.