Bad debts are a huge problem for many small businesses. In fact, according to recent research, more than 70 percent of small businesses have experienced late payment in the last 12 months; two-thirds had to write off their invoices with 20 percent saying they lost £5,000 or more. Eek! That’s a lot of money. If your business is affected there are a number of initial steps you can take to try and settle the matter legally which you may find surprisingly fruitful. But if all else fails and your customer still refuses to pay, your last resort is to apply to the courts for help using a ‘Form N1’.
Documents you might need
- Acknowledgement of debt
- Guarantee for the payment of a debt
- Offer for making part payment of a debt via instalments
- Promissory note in basic form
- Promissory note with interest and repayable by instalments
- Debt collection letters for unpaid invoices
- Form N1 - Claim form for debt recovery
- General power of attorney to collect debts
- Letter of claim for an outstanding invoice
- Assignment of debt and notice
- Guarantee by several persons of limited sum
- Guarantee deposit and charge as security for advances to a third party
- Guarantee for the performance of a contract