Question

23. What are the three steps in recovering debt?

1.

2.

3.

Answer 1

Answer:-

Three steps in recovering debt:-

Step 1 : Send a Letter Before Action

Before giving any legal procedures a Letter Before Action (LBA) ought to be sent to a debtor. A LBA is a formal letter which sets out what is owed from a debtor to your business. It gives your client a set timeframe (usually 7 days) in which to pay. A LBA can be sent for as little as £1.50 in addition to VAT and on average, 86% of cases bring about payment at this stage read more.

Step 2: Start a Legal Claim

On the off chance that you send a letter before action to your debtor however you don't get a satisfactory reaction then the following stage in the legal procedure is to give legal procedures through the County Court. This is a formal procedure where the debtor will be sent a court structure expecting them to pay the debt, in addition to intrigue and expenses inside 14 days.

On the off chance that the Late Payment of Commercial Debts (Interest) Act 1998 applies, compensation of £40 – £100 per receipt will also be added to the value of the claim.

Indebtedness An alternative to giving a County Court Claim is to begin indebtedness action, for example, wrapping up procedures against a business or bankruptcy procedures against an individual.

Step 3 : Judgment

A County Court Judgment (CCJ)is a Court Order that affirms that the debtor has defaulted on payment. A CCJ can be obtained immediately after the expiry date of the County Court Claim.

The CCJ is the final choice by the Court which enables you to take requirement action so as to gather the debt. The CCJ is also recorded against the debtor's credit record affecting their ability to obtain credit .

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