Limited Company Debt: What Can Bailiffs Do?
Limited Company Debt – What Can Bailiffs Do?
Dealing with debt can be a stressful and overwhelming experience for anyone, especially when it comes to business debts.
For limited companies, the impact of debt can be detrimental not only to the company’s finances but also its reputation and future prospects. In extreme cases, creditors may resort to sending bailiffs to collect their debts. This is not always necessary but sometimes it is essential.
So, what exactly are bailiffs and how can they affect a limited company debt situation? This article will delve into the details of how bailiffs operate and what options limited companies have when faced with this scenario.
Who are Bailiffs?
Bailiffs, also known as enforcement agents, are court-appointed officers who have the legal power to collect outstanding debts on behalf of creditors. They can be employed by either the government or private companies and act as a last resort for creditors to retrieve unpaid debts.
Bailiffs have the authority to visit premises, seize assets, and even take legal action against debtors. In most cases, they will try to negotiate with the debtor to reach an agreement on how the debt will be repaid.
If no agreement can be made, they have the power to remove goods from the debtor’s premises and sell them at auction to recover the outstanding debt.
How do Bailiffs Operate?
When a limited company falls behind on payments to a creditor, the creditor may apply for a County Court Judgment (CCJ).
This is a legal order that confirms the amount of debt owed and provides a deadline for repayment. If the debtor fails to pay the specified amount by the deadline, the creditor can then request for bailiffs to be sent to enforce the CCJ.
Before deploying bailiffs, creditors must send a notice of enforcement giving the debtor at least seven days’ notice before they can visit. This gives the debtor one last chance to settle their debt or make alternative arrangements.
Once the bailiffs arrive, they can take control of goods belonging to the debtor, including office equipment, machinery, and even vehicles. In some cases, bailiffs may also have the authority to seize money from a company’s bank account or request payment from its clients.
Limited Company Debt: What are the Options?
For limited companies facing debt collection by bailiffs, there are several options available to help manage the situation:
- Negotiate a Repayment Plan: The best course of action is to negotiate a repayment plan with the creditor before bailiffs are even involved. This shows good faith and can prevent further legal action.
- Request Time to Pay: If the company is struggling to make payments due to financial difficulties, it may be possible to request a Time to Pay arrangement with the creditor. This allows for payments to be made in installments over a longer period of time.
- Apply for an Administration Order: If a company has multiple outstanding debts, it may be beneficial to apply for an administration order. This is a court-approved debt restructuring plan that can reduce and consolidate debt payments into one affordable monthly payment.
It also protects the company from further legal action by creditors.
- Seek Professional Advice: In complex debt situations, it may be wise to seek professional advice from a licensed insolvency practitioner. They can provide guidance on the best course of action and help negotiate with creditors on behalf of the company.
What are the Rights of Limited Companies?
Limited companies have certain rights when dealing with bailiffs, including:
- The Right to Ask for Proof of Identity: Bailiffs are required to provide proof of identity and a copy of their certificate before entering the property.
- The Right to Request a Warrant: In most cases, bailiffs require a warrant or court order to enter business premises. If they do not have one, companies have the right to refuse entry.
- The Right to Complain: If a company feels that the bailiff has acted unlawfully or unfairly, they have the right to make a formal complaint. Complaints can be made to the court or professional bodies such as the National Association of Enforcement Agents.
Do I need Bailiffs to collect my Limited Company Debt?
No, you do not even need a CCJ to collect a Limited company debt. Business Debt Collection can be conducted without the unnecessary expense of obtaining a County Court Judgment. Working with Federal Management ensures your company debts are recovered quickly and at minimum cost to you or your company.
Federal Management recovers millions of pounds every year on behalf of individuals and Companies just like you. Less than 1% of the cases we deal with require expensive Legal action for unpaid invoices etc
Even if you have a CCJ already and are looking for CCJ Enforcement, we can help enforce the CCJ for you. This includes employment tribunal award not paid.
Limited Company Debt Collection
Commercial Debt Collection is a very different process to Consumer Debt Collection. There is more transparency and accountability with collecting a debt from a company. Penalties can sometimes be added to the principal sum owed under The Late Payment of Commercial Debts (Interest) Act 1998.
It can be a very time consuming process and this is where Federal Management can help recover what is owed. We take out the hard work associated with recovering Limited Company debt.
When it comes to Limited Company Debt Collection, it’s essential to work with a professional and experienced agency like Federal Management who understands the nuances of this type of debt collection.
My Limited Company is owed money – What Can I do?
There are various steps you can take as a Business owner to recover unpaid invoices and suchlike. Read our free tips for business debt collection.
If you have had no response to a letter before action and want to escalate the situation then you have come to the right place. Federal Management are here to help you and your business collect what it is owed. Call us now for fast free advice on your best options to recover unpaid business debt.