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A Quick Guide to Debt Recovery in Scotland, 16th May 2012 - Click for larger version A Quick Guide to Debt Recovery in Scotland, 16th May 2012

In the current economic climate, late payment of debt is affecting more and more individuals and companies alike.

Debt recovery can often be a frustrating and time consuming process, however our disputes team can assist and advise you on how to recover debts in the most efficient and cost effective way.

We always tailor our advice to meet your individual needs, but for your ease of reference we have summarised below some of the main courses of action.

1. Demand Letters

In the majority of cases, the first step will be to serve the debtor with a demand letter, requesting payment with a specified timeframe. There are different types of demand letters and we will advise on which is most suitable to your specific circumstances. A demand letter will often be enough to provoke a response from the debtor, whether it is full payment of the debt or an agreement to enter into an installment payment plan.

Where a demand letter is not sufficient to provoke a response from the debtor, our disputes team will guide you through the alternative routes of recovery. This may or may not involve raising an action in the Scottish Courts.

2. Court Actions

Before raising court proceedings, it is prudent to carry out some background checks on the debtor. We have a variety of contacts who we can instruct to carry out such checks. These checks often help to establish whether or not the debt is recoverable, i.e. whether or not the debtor could actually pay in the event that Decree is obtained. This can help to avoid the situation of throwing good money after bad.

In Scotland, there are three different types of court action, depending on the value of the debt, which are as follows:

· ‘Small Claims’ - for debts up to the value of £3,000;

· ‘Summary Cause’ - for debts between £3,001 and £5,000; and

· ‘Ordinary cause’ - for debts over £5,000.

Before raising a court action, our disputes team will advise you on the full process, estimated costs and merits of proceeding with the action. The exact procedure will differ depending on the type of action raised. The first step in all actions is for us to draft the relevant papers and then lodge the same at court. Once the papers have been lodged at court, it generally takes about 7-14 days before the same will be returned to us. As soon as the papers are returned from court, we can then serve them on the debtor.

At this stage, the process will differ depending on the type of action raised and whether or not the action is defended. The majority of court actions will settle before they go to a full evidential hearing, however some will have to be resolved in court. If your case is defended and calls in court, we will appear at the hearing on your behalf and represent your interests until resolution of the dispute.

If we obtain a judgement (Decree) in your favour, we can then advise on the best way of enforcing the Decree and securing payment from the debtor.

Our other services include:

· Charges for Payment

· Arrestment Orders

· Inhibitions

· Bankruptcy and liquidation petitions

For more detailed advice on recovering outstanding debts, please contact Alan McKee, Matthew Coffield or Amy Thomson.

Last updated: 10.53am, Tuesday 23rd October 2012

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