Debt Settlements: How to Agree a Settlement with a Debtor
Here are a couple of interesting cases we have been working on that have resulted in successful settlements being achieved for our clients.
Case One
We have been working with a well-known letting agent, helping them recover rent arrears on multiple matters. We had five landlords who were all owed significant arrears from the same debtor.
The letting agent had attempted to contact the debtor to try to recover the debts in the past but was ignored or had the phone put down on them. Well drafted clear and concise letters before action (LBA) were sent out, stating the amount owed and consequences of non-payment. This was followed up a few days later with an email with attaching the LBA, and then followed by a phone call.
When I called, I was passed to the company director who was trying to reduce the debt by saying they had sublet these properties out and they had never received the rent. I quickly explained that this was their own agreement with their tenants, and our client needed to be paid regardless of that separate agreement.
Shortly afterwards, the debtor requested bank details in order to make payment and paid the debt in full a couple of days later.
This was a great result for the landlords and the letting agent who had been chasing these debts unsuccessfully for some time.
Case Two
After recently gaining possession of a property and obtaining a possession order with a money judgment, this matter was referred over to our Debt Recovery team to work their magic. We already had a judgment so we quickly traced the debtor so we could look to enforce the judgment.
Once we had all the information we needed from the client a trace was instructed and, only a couple of weeks later, we had a positive trace for a new address. As soon as this trace was sent to us, we sent out a pre-enforcement letter which explained to the debtor that we had a judgment, and we would look to enforce if payment was not made.
We sent this letter to see if we could recover without incurring the additional time and costs of official enforcement methods. It worked! A few days later, the debtor got in touch and offered to pay by instalments over a set period,. The client accepted, extremely happy as they didn’t believe they would ever get their money back and certainly not so quickly.
Each case is different and it takes years of experience to know when to settle and when to push for more.
If you are owed money then feel free to contact me and I will be more than happy to discuss your options for recovery.
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