JMS Debt Solicitors Manchester
Whether you are in business or an individual, debt can have a longlasting and life changing impact on you , your business or both.
At JMS Solicitors we can advise and help our commercial clients with their business debt or as an individual we can advise and help you through the often confusing options and solutions open to you to manage your debt and put an end to your worries.
Our experienced and knowledgeable Team are here to help.
Contact us today:
If you are a business, whether a sole trader or a limited company, JMS Solicitors can help with your debt collection and recovery. Outstanding debt owed to your business can have a severe impact on your cash flow and in turn affect your ability to continue trading effectively. JMS Solicitors can help with debt recovery services:
JMS Solicitors are also able to advise and help you if you are defending debt recovery action against your business from dealing with Letters before Action through to contesting Winding Up Proceedings.
Our fees are competitively priced and are dependent on the solution we provide you.
Please call today and discuss with our Team, how we may help you.
Personal debt can cause severe stress and anxiety and impact on your ability and the choices you make to address your situation. At JMS Solicitors we can offer advice and help with debt recovery actions against you from Letter before Action to Repossession. Our expert advisors can discuss whether Bankruptcy or an IVA (Individual Voluntary Arrangements) is suitable for your situation and offer impartial advice on the best course of action to take to resolve your debt.
If you find yourself in the unfortunate situation of being owed money by a debtor, then JMS Solicitors can assist with the options open to you to recover the money owed to you.
To recover debt we would charge 10% plus VAT of whatever is recovered. Other services that we can also offer are:
Please call today to discuss your situation with one our Team.
The Letter Before Action (also known as the "7 day letter") is the letter telling a debtor that unless full payment of the debt is received within 7 days court action will be taken against them. Quite often a solicitor’s Letter Before Action is sufficient to prompt a debtor to settle their debt and no further action is necessary.
It is important to serve a Letter Before Action as the Courts will want to see evidence that a creditor has acted reasonably in relation to proceedings. If no opportunity is given to the debtor to pay the debt prior to the issue of the court action, the Court may not order the debtor to pay a creditor’s legal costs.
Once legal proceedings have commenced through the courts the papers will need to served to the debtor ensuring that all reasonable methods have been taken to deliver the documents to the debtor. Failure to serve papers could result in a case being adjourned or the document(s) being excluded from the trial.
A statutory demand must be signed and dated by the creditor or a person authorised to sign on the creditor’s behalf. It must state whether the debt is payable immediately or at a future date, the amount of the debt and the consideration for it (if there was no consideration, then it must detail the way in which the debt arose). It must state details of the unsatisfied judgment or, if none, the basis for the creditor’s belief that the debtor appears to have no reasonable prospect of being able to pay.
Any interest claimed must be detailed (ie the amount or rate and the grounds on which payment is claimed) and is limited to the amount accrued at the date of the demand.
Where the creditor holds security, the full amount of the debt is included in the demand, but the nature of the security and the value of the assets needs to be stated, together with the unsecured element which is claimed for payment. Security referred to must be held over property of the debtor, not security in connection with a third party, for example held over company assets.
The creditor is bound to do all that is reasonable to ensure that the demand is brought to the debtor’s attention, including personally serving the statutory demand on the debtor if practicable.
If a debtor does not pay after a creditor has obtained judgment then the creditor may want to consider the following:
• Oral Examination
• Garnishee Proceedings
• Warrant of Execution
• Warrant of Delivery
• Attachment of Earnings
• Charging Orders
• Judgment Summons
Oral Examination
This is where a debtor is told to come to court to provide the court with details of his or her Income, Capital and Savings. The creditor can then decide from this information whether the debtor is able to repay the debt.
Details of the amount of money which remains unpaid must be provided under the judgment.
The court will serve an Order telling the debtor to come to court - some courts prefer to send an Affidavit or Questionnaire to the debtor to complete first. When the debtor attends court he or she will be questioned by either a District Judge or an officer of the court. The creditor does not have to be present, but can be if they wish, they may also write into the court with details of any questions that they would like the court to ask the debtor.
The court will take notes of what the debtor says and will send the creditor details if not present at court.
If the debtor refuses to answer any questions or produce documents the creditor can apply to the court for an Order that they must do so. This is called a "Penal Notice" and the creditor should ask the court to attach it to the Order.
If the debtor still fails to obey the Order they will be in "Contempt of Court" and if the Order has a Penal Notice attached then the creditor can apply to the court to commit the debtor to prison for breach of the Order.
If the debtor does not attend court then the court has to fix a new date to give him or her the opportunity to attend. If the debtor asks that the creditor pay their travel expenses for attending court the creditor must pay these not less than 7 days before the Hearing. The creditor must then file a Certificate at court to say either that the debtor has not requested any money or that they have paid it. This Certificate must be filed with the court 4 days before the Hearing.
Garnishee Proceedings
If the debtor is owed money by a 3rd Party then the creditor can get an order that the 3rd Party pays that money direct to the creditor, to pay off the debt owed to them. To do this the debt must be at least £50 and the 3rd party must be within England & Wales.
The court will grant the creditor a temporary order which they must serve on the 3rd party. A hearing date will then be fixed when the 3rd party can attend and make objections about the order.
If the 3rd party is a bank or building society etc, where the debtor holds an account payment of the debt must not leave less than £1 in their account.
Warrant of Execution
This is a request for the court Bailiffs to enter the debtor's home or business premises to seize the debtor's personal belongings to sell and pay off the debt.
Bailiffs cannot seize any of the debtor's essential living items such as bedding, clothing, pots and pans, furniture, household equipment, tools of a trade etc.
They cannot seize any goods on hire purchase or belonging to someone other than the debtor. Details of the amount unpaid must be supplied. If the judgment was for the debtor to pay by instalments the creditor must show the whole or part of the instalments is outstanding. The creditor can then claim payment of the total sum outstanding as long as it is more than £50.
No hearing is necessary, the court Bailiff will go to the debtor's address and can accept payment from the debtor or remove the debtor's goods. They may ask the debtor to sign an agreement that he or she will not remove or dispose of their goods until he or she has paid the debt they owe you.
A court Bailiff cannot force his way into the debtor's home or business to seize goods.
Warrant of Delivery
If the debtor has a particular item or goods belonging to the creditor and they are seeking their return then this is the method of enforcement should be used. If the judgment or order says the goods are to be returned to the creditor then an application should be made to court.
No hearing is necessary, the court Bailiff will contact the debtor to fix an appointment to remove the goods.
Attachment of Earnings
The creditor can use this method of enforcement as long as the debt is not less than £50. If the debtor is working you can apply for an Order that the debtor's employer deduct a certain amount from the debtor's wages each week or month in order to pay the debt.
The creditor must disclose how much of the debt remains unpaid, or if the whole or part of the instalment payments have not been made.
The court will fix a hearing date and serve the creditor and the debtor with details of the hearing date.
They will also send the debtor a reply form to complete which they must return within 8 days of receiving it. A copy of the reply will be sent to you.
If the judge is satisfied that the debtor is not Unemployed or Self-Employed he or she will make an Attachment of Earnings Order.
The debtor can within 14 days apply to the court to reconsider their order and another hearing date will be fixed when the court will either "set aside" it's previous order or continue it.
The debtor is entitled to have part of their earnings protected against deductions. The Judge will decide how much this will be and also decide the amount to be deducted and how often. If when the debtor gets to court he or she promises to pay, the court can "Suspend" the Attachment of Earnings Order.
If the debtor does not then pay then the creditor can apply to bring the Order back in force. If the debtor fails to attend court, but the creditor has sufficient information about the debtor's earnings then the Judge can still make an Order in the creditor’s favour. Otherwise the Judge can fix another date and threaten the debtor with imprisonment if he or she does not attend.
Charging Order
If the debtor owns property you can apply to the court to "Register a Charge" at the "Land Registry" against the debtor's property to show that you have an interest in the sale proceeds of the property. This forewarns any person intending to buy the debtor's property.
If there are any other Charges registered before you on the Land Register then those Charges will be paid first before the creditor’s Charge, e.g if there is a mortgage registered against the debtor's property then that mortgage will be repaid first from the proceeds of sale.
Once the creditor has registered a Charge against the debtor's property then they can apply to the court to Order that the property is sold so that their Charge can be paid as soon as possible. The creditor must supply the court with a ‘statement of truth’ or affidavit.
The court will grant the creditor a temporary Charging Order called a "Charging Order Nisi".
They will then fix a hearing date when the creditor, the debtor and any other owners of the property and any other creditors of the debtor will have to come to court.
The court will send the creditor the Charging Order Nisi and they must serve a copy of this together with a copy of their Affidavit or Statement on the debtor and any other owners of the property and other creditors.
The court will then decide at the hearing whether or not to make the Charging Order "Absolute", (this means making the Order permanent).
If making the Charging Order Absolute would give the creditor an unfair advantage against the debtor's other creditors the court may decide not to make the Order Absolute (permanent).
If the creditor is successful in obtaining a Charging Order they can then apply for an "Order for Sale" of the property.
The court will fix a hearing date and serve copies of the creditor’s application and Affidavit or Statement on the debtor and any other owners of the property.
The debtor can argue that there is a "Negative Equity" and therefore you will receive no money if the property is sold.
Or the court can attach conditions, for example, if there are young children living at the property who might be made homeless. The court may attach a condition that the property is not sold until the youngest child reaches 18.
If an order is made that the property is to be sold the net proceeds of sale (after deduction of sales costs) will have to be paid to the court.
Judgment Summons
If the debt relates to unpaid maintenance under a court order, unpaid income tax, unpaid state pension premiums or unpaid social security contributions then the creditor can apply for a Judgment Summons.
Details must be given to the court of how much of the debt remains unpaid or if any instalments payments are outstanding.
The court will fix a hearing date and send notice of the hearing date to creditor and the debtor. At the hearing the judge can either order the debtor to pay by instalments. Or if it can be shown that the debtor can, but won't pay the court can send the debtor to prison for up to six weeks.
If the debtor fails to attend court then the court can issue a warrant for his or her arrest.
A petition for the compulsory winding up of a company incorporated by registration under the Companies Acts may be presented by the company, or its directors, or by any creditor or creditors, or by a contributory (i.e. shareholder) or contributories, various officials (e.g. Secretary of State for Trade and Industry and the Attorney General) administrators and administrative receivers or by all and any of these parties separately or together (Insolvency Act 1986)
In practice the one most frequently exercised is a creditor’s petition on the grounds that the company is unable to pay its debts.