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Last Updated: Thursday, 22 September 2005, 15:00 GMT 16:00 UK
Ask the expert: Dealing with debtors
A judge
Court is only one of the options open to Ms Ward
BBC News Ask the Expert column gives readers a chance to have their financial questions answered.

This week's expert is Claire Birkinshaw a legal expert at the Federation of Small Businesses.

Your Money reader Jennifer Ward, who runs a small business, would like advice on how to chase client debt.

One client of Ms Ward's owes her 15,000 and could go out of business if she is not paid what she is owed. Unfortunately, Ms Ward is struggling to

find the money to pay for legal advice.

Claire Birkinshaw writes:

The starting point is that you should contact the Law Society to find out whether you might be able to get a solicitor to take on your case on a probono basis.

This is, unfortunately, unlikely.

You could also contact your local Citizens Advice Bureau to see if they will act for you.

Other than that, one option is to issue civil proceedings yourself if your client still refuses to pay.

Bear in mind that legal proceedings are really a last resort because they can be both time-consuming and costly.

A final option as an alternative to issuing civil proceedings is to try the services of a debt recovery agent

Depending on the exact amount in dispute, it will cost 230 to issue proceedings for a claim up to 15,000 and 350 if your claim is more than 15,000.

Going to court

To issue proceedings, you need to complete a form N1 which you can access on the web at www.courtservice.gov.uk.

This can then be lodged at your local County Court. Once your customer has filed their defence, you will be sent an allocation questionnaire. You will need to pay a further 80 at this stage.

You have not stated why your client has refused to pay your bill (i.e. whether it is because they are not happy with the quality of the work you have carried out or whether it is simply because they don't want to).

Assuming the matter is not too complex, it is likely it will be allocated to the County Court rather than the High Court.

Your case will not be allocated to the small claims court because the debt is in excess of 5,000.

If you win your case, you will be able to recover not only the sum you are owed but also your court costs, witness expenses and reasonable travelling expenses (and you should also be able to recover any legal costs).

However, if you lose, you need to be aware that you are at risk of being forced to pay your client's legal costs.


As well as threatening to issue legal proceedings, it is possible for you also to threaten to issue bankruptcy proceedings against your client.

There is a procedure to be followed but the starting point is to fill in a statutory demand which is a special form requiring your client to pay the debt.

You then need to serve this on your client and they have 21 days to comply with the demand. If the client fails, the next step is to issue a bankruptcy petition, which costs 150.

A final option as an alternative to issuing civil proceedings is to try the services of a debt recovery agent.

Agents are generally paid on results and they will take a percentage of any sum recovered. Factors will buy your debt for a fee. Look in your local Yellow Pages for details.

Given your current financial situation, this may be your best option, even though it means you will not receive the full 15,000 you are owed.

The opinions expressed are those of the author and are not held by the BBC unless specifically stated. The material is for general information only and does not constitute investment, tax, legal or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation.




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