Debt collection in the wake of the coronavirus pandemic – what are the options?


In these difficult and uncertain times, whatever the size of your business, managing cash flow can be challenging. One particular difficulty for many firms is dealing with debt collection. Maximising cash recovery should be a priority for your business to secure your financial future.  However, this may be tough to navigate during the pandemic. At present, many of your debtors may be struggling financially, or claim they are unable to pay invoices.

One of the challenges we face as debt recovery lawyers is ascertaining the true financial circumstances of our clients’ debtors and therefore, obtaining maximum recovery of debt. Many debtors may try to get out of their obligations, claiming that coronavirus has severely impacted their business – even when this is not true. Deciding the best way forward can therefore be difficult and the relevant risk needs to be weighed up.

Communication is key

It is more important than ever to keep in regular contact with debtors. In challenging times, it can be easy for people’s minds to be focused on other matters. You should ensure that you keep lines of communication open to fully understand the financial situation of those you are working with and to avoid costly disputes further down the line. In the first instance, try to come to an informal agreement with debtors who may have fallen behind. It is obviously going to be beneficial for ongoing relations with the debtor to discuss matters amicably as well.

Act quickly if debts remain unpaid

Most debtors are willing to work to resolve debts and invoice disputes to avoid further action. However, if a debtor refuses to pay, you will need to escalate the issue. Obtaining professional advice to review your options at an early stage can help, so you can form a view on the best course of action from a costs/benefit position.

When you have concerns about the debtor’s ability to pay what is owed to you, commencing legal proceedings at an early stage may allow you to obtain some form of security, meaning that if your debtor later becomes insolvent, you have a better chance of recovering your debt.

Letters Before Action

The first step will normally be to send a Letter Before Action to your debtor or debtors in accordance with the relevant pre-action protocol (part of the court rules the parties are required to follow). Often, a formal legal letter is enough to encourage a debtor to discuss their financial situation with you and to come to a suitable arrangement. A Letter Before Action sets out:

Court Proceedings

If the debtor fails to make payment or respond to the Letter Before Action, you can then take steps to begin court proceedings. Debt recovery proceedings are typically issued through the County Court Bulk Centre (CCBC) or the County Court Money Claims Centre (CCMCC). Both of these are currently open and in operation, despite lockdown.  However, the process itself may be delayed, compared to usual timescales, due to backlogs caused by remote working.


If you obtain a Judgment against your debtor, then you may still have to take steps to enforce it, in order to get paid.  This may be instructing a Bailiff or High Court Enforcement Officer to attend the debtor to seek payment from them. In light of COVID-19, the Government made an amendment to the Taking Control of Goods Regulations (2013). At present, enforcement officers may not attend residential properties under writs of control (which give them the power to enforce the Judgment). However, enforcement agents are working to contact debtors over the phone, by email and by text message to assist with early payment.

Andrew Shipp

Commercial Disputes
Property Disputes

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