Customers absconding from paying their invoices causes a lot of headaches for businesses as they try to manage cash flow and spend copious amounts of time and resources chasing outstanding and late payments.
In some instances, when debtors continue to refuse to pay and tried and tested invoice collection methods are no longer working, you can take out a County Court Judgement (CCJ) against the debtor.
A CCJ, in most cases, is enough to make the debtor settle their debt in full, as requested by the court.
However, we’re aware that a small majority of debtors will still refuse to pay and settle the outstanding debt. In these circumstances, applying for a Writ of Control is the next logical step to support your small business debt recovery.
What is a Writ of Control?
Issued by the High Court, a Writ of Control is a formal court order that allows you, as the creditor, to instruct High Court Enforcement Officers to recover the debt, i.e., a business can apply for a Writ of Control to the High Court against a debtor to recover unpaid money owed.
If full payment upon issuing the Writ of Control is not made, the recovery of the debt by HCEOs is carried out by seizing and selling the debtor’s assets to the value of the outstanding amount (also known as `Execution against goods`) – the High Court Enforcement Officers ultimately become responsible for the Writs enforcement.
A High Court Writ of Control is typically used to enforce the CCJ you have in place against the debtor.
Note you cannot apply for a Writ of Control:
- If the outstanding amount is less than £600
- To enforce judgement of regulated debts, i.e., car loans or credit card debt (County Court Bailiffs enforce these)
- When there is a payment allowance over a specified time
- If the judgement/order contains directions regarding service on the debtor
- If the order/judgement is conditional.
Small Business Debt Collection
Typically, once the Writ of Control has been approved, a notice of enforcement will be sent to the debtor. Following this, a High Court Enforcement Officer/team will visit the debtor’s address (making it vital that you have up-to-date information and records) and review the assets, which they can then place under their control.
At this stage, the assets under control cannot be sold or transferred to a third party by the debtor until the CCJ has been paid.
All payments should be recorded, and the HCEO should be informed, so they are fully aware of the outstanding balance.
If the outstanding amount is not settled within the agreed timeframe, and the debtor has assets to the value of the debt, the HCEO is legally allowed to remove these and sell them, typically at auction, to settle the amount, including any additional fees, costs, and interest (8%).
Only goods proven to be owned by the debtor can be sold, and these goods can include items such as vehicles, jewellery, art, and livestock.
Items that HCEO cannot remove include tools, household items required to meet basic living needs, and anything with a finance agreement attached to it, i.e., a car on lease.
The HCEO can enforce the Writ any day of the week except for Bank Holidays and Christmas Day between the hours of 6am and 9pm. Entry into a property must be by normal means; forced entry is not permitted.
How long does it take to get a High Court Writ?
The whole process can take as little as a week, but it can also take as long as 28 days. In essence, a Writ of Control can be issued immediately after a court’s judgement, and the good news is you don’t have to give prior notice to the debtor that you are obtaining a Writ of Control.
Once approved, the Writ of Control will last 12 months from the issue date, and you do have the option to extend if required, although you will have to provide a detailed explanation as to the reason why you need this extension and why HCEOs weren’t used during this period. In addition, you can only extend the Writ once, which must be done before it expires.
However, if the debtors enter into a controlled goods agreement but then defaults on the payments, the Writ will automatically be valid for a further 12 months from the breach.
Applying for a Writ of Control is a cost-effective debt collection solution with high success rates, especially as penalties can be enforced if the debtor attempts to obstruct the HCEO from enforcing the Writ.
Debt Recovery Agency – Direct Route
Applying for a Writ of Control is a big step, and you need to make sure you get it right and that you have exhausted all other debt collection methods.
The aim is to achieve a positive result, and that’s what we do.
We use our experience and expertise in debt collection to support you in making sure your invoices are paid on time every time.
To learn more about our services and how we can help, call +447860197476 or email your questions to memberbenefits@directroute.co.uk