Is your company owed money? Which recovery route is the most cost-effective?

Is making a debtor bankrupt or bringing a winding up petition the best way to recover a debt? Insolvency fees including Official Receiver fees are set to rise significantly from the 9th January 2025, which may affect your thinking in terms of how you choose to recover your money. Companies often believe issuing insolvency proceedings against their debtors are their best option to recover debts but a number of factors need to feed into the decision making.

A couple of the alternative debt collection options include:

1. Debt Management Plans – This is where we would enter into negotiations with the debtor and come to an agreed payment plan to suit all parties
2. Court Proceedings– This is the standard form used to initiate a claim for civil disputes. This type of claim would not seek to wind up a company or make a debtor insolvent. Instead it would be used to seek your specific debt from the specified debtor.

Before deciding whether to go down the insolvency route, we would recommend that a rigorous cost benefit analysis is carried out looking at a number of factors before deciding which route should be pursued. Some of the matters to be considered are:

1. Size of debt
2. Whether it is believed that the individual or company being pursued is already in financial distress
3. Whether the individual or company has sufficient assets to pay the debt.

How we can help!

Although some may think insolvency proceedings are the quickest and best way of recovering debt, there are plenty of alternative routes which may better suit your business. Please contact our Litigation team who will be able to advise. We can be contacted on 0161 832 3434 or info@kuits.com.