Chartered Legal Executive
Andy Howard is a highly respected debt recovery professional within Leeds and across the North of…View Profile View all
Increase in the threshold for Bankruptcy cases
From the 1st October 2015, the minimum debt thresholds for bankruptcy increased from £750 to £5000. This means that we can no longer serve a statutory demand and use the bankruptcy route unless the debt exceeds £5000.
Proposed changes to pre action protocol.
Thankfully at present it does not affect business to business debts unless you are dealing with a sole trader.
If you are dealing with a consumer or sole trader then at present the number of hoops you have to jump through is potentially going to increase in respect of the information that has to be given in the initial letter and also the length of time that the debtor will have to respond – increasing potentially to 30 days. It is only at the consultation stage but large parts will probably come into force.
This means that every business should tighten up its information gathering steps when taking on a new client so as to identify those customers who do not fall into the new regime, monitor the accounts, consider reducing the credit period or not giving credit and be prepared to start the formal process.
Proposed increase in court fees and what it means for debt claims.
It has been announced that the Ministry of Justice (‘MOJ’) is proposing yet another increase in civil court fees, which will no doubt be a further headache for creditors who are planning to issue claims in the High Court or County Court.
March 2015 saw the MOJ introduce a new change in the way that issue fees are calculated whereby claims exceeding £10,000 now attract an issue fee equal to 5% of the value of the claim. This has meant that in some cases the fee has risen by nearly 400%. The only crumb of comfort for creditors is that the fee has been capped at £10,000 for any claims over £200,000, although under the new proposals the MOJ has announced an increase of this cap from £10,000 to £20,000. This proposal, if it is indeed put into effect, will generate £48m extra revenue for the MOJ.
Meanwhile, however, the MOJ has confirmed further increases in respect of the following:
As can be seen debt collection has become a whole lot more expensive!
For advice generally on any debt collection issue, please do not hesitate to contact Andy Howard on 01132 206277.