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Covid19: debt recovery in the current climate

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Posted by Kalpesh Patel on 25 April 2020

Kalpesh Patel - Debt Recovery Lawyer
Kalpesh Patel Legal Manager

The impact of COVID-19 has been felt by business throughout the United Kingdom. Some companies continue to operate as usual, working from home while others remain entirely (or partly) shut-down, unable to operate in these challenging and uncertain times. 

In times of uncertainty, one of the most fundamental issues to all companies is cash flow. Therefore reviewing aged debts and collecting overdue debts will be a top priority for many businesses. We have received a number of questions relating to debt recovery in the current climate and therefore set out some FAQs below: 

Our customer has not paid our invoice and is not returning our calls. What do we do?

In short, nothing is stopping you from escalating your unpaid debts. Many of the debts that are currently outstanding may have been outstanding for some time now, and therefore it is important to consider taking action.

Consider outsourcing the debt to your solicitors. Once a debt has exhausted your internal credit control process, the first step in recovering an unpaid debt is to send a “Letter Before Action” or “LBA”. 

The Letter Before Action will typically need to be sent in accordance with either the Practice Direction – Pre-Action Conduct and Protocols (“PDPACP”) or the Pre-Action Protocol for Debt Claims (“PAPD”). 

The Pre-Action Protocol for Debt Claims covers debts owed by an individual to any company and requires the creditor to allow the debtor with 30 days to respond to the Letter Before Action. 

The Practice Direction – Pre-Action Conduct and Protocols requires the creditor to provide the debtor with 14 days to respond in a straightforward case. 

With the above in mind, your records must be kept fully up to date and accurate to identify whether you are trading with a limited company, limited liability partnership or an individual. You must be pursuing the correct entity, as failing to do so, may result in wasted costs and substantial delays in recovering your debts.

We want to take a customer to court for not paying our invoice.
Are the Courts open? 

Court Proceedings

If the debtor does not respond within the required timeframe, the next step is to consider issuing Court proceedings. 

In light of the impact of COVID-19, a number of the courts have been temporarily closed or consolidated to adhere to government guidance. However, the majority of claims for unpaid invoices are issued through the County Court Money Claims Centre or the County Court Bulk Centre, which remain operational. Therefore claims for unpaid invoices continue to be processed, albeit at slower processing times than usual. It is therefore crucial that Court proceedings are submitted to the court as soon as possible as the court is likely to take longer processing new claims. 

Therefore, you must bear in mind that, even during these challenging times, the Court system remains open for you to issue proceedings to recover the money that your business is due.

What action can I take if the customer doesn’t pay after I have obtained a CCJ?

Enforcement of CCJ

If the debtor does not respond to the Court proceedings, you are entitled to obtain a County Court Judgment (“CCJ”). Once the CCJ has been obtained, the debtor has a calendar month to pay the Judgment debt, failing which the Judgment will remain on the register for six years. If the Judgment debt is paid in full after a calendar month has expired, the Judgment will be marked as satisfied only and not removed from the register. Therefore many debtors will contact you following Judgment being entered to avoid the entry remaining on its register for six years.

Once a CCJ has been obtained (and remains unpaid) you are entitled to commence enforcement. Due to the impact of COVID-19, High Court Enforcement Officers and County Court Bailiffs are not carrying out attendances at properties to execute Warrants and Writs of Execution. Therefore creditors are limited to any immediate enforcement steps it can take to enforce a Judgment. In any event, it may be worth considering instructing a High Court Enforcement Officer or County Court Bailiff at this time. As the Courts remain, open High Court Enforcement Officers can still obtain Writs (which remain live for a year) and send out Compliance Letters requesting payment from debtors. Many High Court Enforcement Officers will carry out enhanced checks on the debtors in readiness for an attendance (once they can do so). Once the officers can schedule attendances, there is likely to be a significant backlog and influx of new instructions. It might be worth instructing them now to avoid any delays in processing your Writs or Warrants. 

One of the other options available to creditors is to attempt to secure the debt by way of a Charging Order. This in itself, may not result in immediate repayment. However, it may be a sensible option at this time with limited other options available.


While caution has to be exercised and commercial and wider considerations taken into account when considering legal proceedings, key stakeholders within businesses need to ensure they are in the best position possible to recover their debts and should not be deterred from taking action at this moment in time. 

About the author

Kalpesh Patel

Legal Manager

Kalpesh is a Fellow of the Chartered Institute of Legal Executives who has specialised in debt recovery since 2011.

Kalpesh Patel

Kalpesh is a Fellow of the Chartered Institute of Legal Executives who has specialised in debt recovery since 2011.

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