Debt Collections Handbook UK 2018

Debt Collection Handbook

  • United Kingdom
  • Agriculture,
  • Automotive/Transport,

24th September 2018

Having drawn from the expertise of Atradius Collections' local offices, the International Debt Collections Handbook explains the different regulations and procedures for debt collections in the UK.

Amicable collections

General information

 

 

 

Handbook Report Page - Amicable Phase

 

 

 

Our collectors try to collect debts without recourse to legal action by telephone and letters. Atradius Collections always tries to obtain payment of debts in full but will negotiate to agree on a payment plan or a settlement figure. In order to support this process in the UK, we must issue a letter before claim, which is the start of the legal process. This is not used in all cases, only in those where the collector considers that the debtor has the ability to pay and needs some strong evidence of our intentions. In England and Wales, we can issue a copy of the proceedings that will be sent to the court in the event that the debtor fails to make payment. When there is a dispute, we aim to reach an amicable solution between the creditor and the debtor. We do this by analysing all contractual documents (e.g. signed contracts, orders, confirmations, invoices and delivery notes, as well as standard terms previously agreed upon). All investigations are completed with the assistance and agreement of our legal team.

Interest

Late Payment of Interest Act

This act sets out to assist businesses faced with late payment problems. It does this by adding a number of rules to contracts between businesses. It is important to realise that this legislation only applies to commercial debts. It does not apply when one of the parties is not acting as a business; for example, sales to a private individual or consumer. The debts should have arisen in the course of business. Both parties should be businesses, commercial entities or public sector organisations. Interest is claimed at the prevailing Bank of England rate – currently at 0.5% plus 8%. The rate is listed as the UK clearing bank base lending rate in the Financial Times and is also known as the repo rate. The rate that applies is the rate in force at the end of the day that the payment was due.

Debt collection costs

As well as interest, the supplier may also charge an amount to compensate for the costs of collecting late payments. The amount of compensation that can be claimed is determined by the outstanding amount as follows:

 

 

Handbook Report Page - Amount owed

 

The Debt Collections Handbook presents a snapshot of the UK's economic situation and covers the following topics:

  • Accepted and most common payment methods
  • Types of companies
  • Legal procedures & legal system
  • Insolvency proceedings
  • Enforcement in debt, movable and immovable property

To read more about steps and procedures undertaken in debt collections in the UK:

 

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Download Debt Collections Handbook UK now!

 

Disclaimer

The statements made herein are provided solely for general informational purposes and should not be relied upon for any purpose. Please refer to the actual policy or the relevant product or services agreement for the governing terms. Nothing herein should be construed to create any right, obligation, advice or responsibility on the part of Atradius, including any obligation to conduct due diligence of buyers or on your behalf. If Atradius does conduct due diligence on any buyer it is for its own underwriting purposes and not for the benefit of the insured or any other person. Additionally, in no event shall Atradius and its related, affiliated and subsidiary companies be liable for any direct, indirect, special, incidental, or consequential damages arising out of the use of the statements made information herein.