Legal Elements Involved In the Debt Collection Process
If you need to recover debts owing to you, then you must follow a formal debt collection process. More than 86% of debts are only paid once a letter is sent before action. In the United Kingdom, payment is usually considered late once thirty days have passed after the invoice is made or goods are delivered. This thirty-day credit period is usually enforced for public authorities, while for businesses, the credit period can extend for sixty days or more, depending on the agreement between a business and a customer. You do have the option of charging interest on late payments, although this is not a statutory right. If you wish to charge interest on overdue payments, you must set the terms and conditions in a contract.
In today’s post, we will discuss all you need to know about debt collection – the legal elements in debt collection, the impact of judgment debts on credit scores, and the process of recovering a debt. We will also explain the process of collecting debts from a customer who speaks a different language, and discuss how you can arrange affordable and reliable translation services for all your debt collection documentation.
What is the Impact of Judgment Debts on Credit Scores?
A judgment is an order from a court, instructing the loser of the lawsuit to compensate the winner of the lawsuit. Judgment can be either monetary and non-monetary. For example, the loser of the lawsuit must either pay a certain sum of money, or complete a certain task in order to settle the case. If you are unable to repay the money to the creditor, your creditor may apply for a county court judgment to make you pay back the money. At this point, you have several options for paying back the due amount: you can either pay the full amount; or you can pay in instalments. If you fail to meet the terms and conditions of a county court judgment, the court may also take action against you.
The judgment remains on the credit report of the debtor for several years and this will affect their credit score. Judgment debts have a huge impact on a person’s credit score. This can negatively affect your ability to get credit for a certain period of time – generally six years – after the debt. However, if you pay the outstanding amount to your creditor immediately, the county court judgment will not be recorded and so it will not appear on your credit profile.
Recovering a Debt
There are four steps for recovering money this is owed to you. First, you send the debtor a letter known as the “letter before action.” If the debtor pays the debt upon receiving this letter then the matter is settled to everyone’s satisfaction. If the debtor does not respond, you can send a legal claim to the debtor through the County Court. This legal claim forces the debtor to pay the outstanding debt, including any interest, within fourteen days. If the debtor still fails to settle the debt, your next option is to obtain a court order (County Court Judgment) to enforce payment of the debt immediately.
In the UK, there are many small businesses that owe money. If you notice that your customer is making excuses , fails to follow the payment schedules, or starts breaking promises to make a payment, then something is fishy and you may be dealing with a bad debt. If you identify such debt problems early, you can avoid various issues brought on by bad debts. If you find that it is too late to retrieve your payment, you must engage the services of an expert solicitor or a reliable debt-recovery firm. The debt collection agencies may make your debtor take the matter more seriously, and make payment without further threats of legal action. Your last option for debt recovery is through the court.
Kings of Translation offer the best services of debt translation at affordable prices
Are you looking for professional translation services in the UK? Kings of Translation is a well-known agency in the United Kingdom, specialising in the translation of financial and legal documents. With extensive experience in the translation industry our team at Kings of Translation, guarantee the delivery of fast, accurate and professional translation of all your debt collection documentation.
Our clients are very happy with the quality of our translations as we do not change the essence of the original debt documentation. Our expert native linguists are highly professional and can translate the debt documents in a variety of languages to guarantee customer satisfaction.