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Money Judgement - Research Paper Example

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According to the following paper, the finance system of a country needs to be designed in such a mode so that the businesses and commercial transactions are not crippled with debt; rather, those dealings can go with full speed for the promotion of the existing economy…
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Money Judgement
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Money Judgement 1. Introduction The finance system of a country needs to be designed in such a mode so that the businesses and commercial transactions are not crippled with debt; rather, those dealings can go with full speed for the promotion of the existing economy. These days, the issue of debt recovery has been one of the growing concerns in particular context of UK. GB Group (2007) states that “[d]ebt recovery is becoming a big business as personal debt in the UK now stands at over £1.3 trillion” (GB Group, 2007). Now, it is the common practice that people likely to overlook or escape the provisions of debt payment for various reasons. In most cases, people intentionally do this, while some others face difficulties because of their poverty or personal inconveniences. Debt collection indicates a means which helps in collecting individual debts and reminds the debtors of their requirements to pay outstanding debt. “The matter of debt collection comes into the issue when procuring debt payment from debtors through ordinary credit control process is proved ineffective” (Getting Paid by Debtors, 2006). 2. Debt Recover Policy “Debt recovery policy is concerned primarily with the recovery of debts prior to legal action being taken but the principles should still be applied wherever appropriate even if litigation has commenced (Debt Management, 2007, p.3). A fair and sound debt recovery policy is a sine qua non for the effective and working finance regime in a given country. “Debt recovery policy should be fair to everyone, particularly for the well- being of low incomes people” (Corporate Debt, 2005, p.3). People are to suffer much hardship in collecting debts. However, in order to win the legal battle in recovering debt money, concerned party or creditor is to arrange sufficient documents and evidences for the courts satisfaction that the said creditor is entitled to have the disputed debt money. “Successful debt recovery suggests the conglomeration of adequate evidences and in particular proof of rent arrears, invoices for remedial work and copies of the inventory and condition check” (Made Easy, 2005). The growing expansion and gradual development of trade and commerce within a state and between states have made the financial dealings and business regulations more complicated. As a result, countries have sharply experienced the necessity of a well- structured debt collection policy corresponding to the existing business regulation. “An ideal debt collection policy provides an overarching framework and covers the collection of Rents, Council Tax, Business Rates, Sundry Debts and Housing and Council Tax Benefit overpayments” (Corporate Debt, 2005). Debt recovery strategy requires a close and continuous contact between the debtor and creditor or the solicitor appointed by the creditor for recovering the debt money. “An effective debt recovery strategy involves a combination of communication methods; such as, telephone, mail, visiting and so on” (Debt Recovery Guidelines, 2002, p.5). Of course, the manner of such contacts should not be oppressive or threatening, and must conform to the accepted good practices. Implementing an effective UK debt recovery strategy is a priority for any business wishing to maximise its cash flow. Amongst nations, UK is mostly concerned to reform its debt recovery strategy and accordingly it has been continuously striving to erect a well-shaped debt recovery strategy. “Debt recovery procedures were significantly changed in 1999 following the reforms implemented by Lord Woolf after the Woolf report” (Debt recovery Agents, n.d.). Again, it is said that “[d]ebt recovery procedures and a corporate debt recovery policy were last approved by Cabinet in June 2006. The procedure relates to all types of debt i.e. Council Tax arrears, Business Rates and sundry debts” (Report of DCS, 2007, p.2). 3. Modes of Recovering Debt money Frequent Cash flow and the prompt collection of debts is one of the most significant considerations for ensuring an efficient and successful business regime in the country. But, due to the disturbances caused by some awkward customers, the internal credit control procedure doesn’t fit with the situation. Consequently, taking resort to legal action for the purpose of recovering debt money is urgently required. It is equally applicable to all sorts of goods and becomes relevant if an invoice has been rendered for the sale of goods or supply of services but the invoice has not been paid. There are various means of enforcing the debt payment or recovery of debts. “If the goods as supplied are easily identifiable, a condition of sale can claim these goods as the property of the creditor until the payment in exchange of the provided goods is paid for in full” (Protect Yourself, 2007). Sime (2006) provides that here are two ways of recovering debt money (p.45): (i) Court Proceedings; and (ii) Insolvency Proceedings. 3.1. Court Proceeding Court proceedings meant instituting legal claim either in High Court or the County Court depending upon the amount of the debt. All claims which worth less than £15,000 must be started in the County Court under the provisions of the Civil Procedure Rules 1998 (Walton, n.d., p.4). In order to institute a court proceeding for recovering debt money against the debtor, creditor must issue proceedings within 6 years of the date on which the money becomes due for payment. In pursuing the procedure, a debt Collector or solicitor can recover most late payment by means of the traditional route of letter telephone. In case of non-compliance with the letter telephone, Solicitor is to send a letter to the debtor in respect of each claim, giving an opportunity for the payment of debt within a period of seven days. An urgent telephone call is made at the end of the seven-day period. After considering the position of the client regarding debt payment, further action is taken by the solicitor against the debtor for the debt recovery. The defendant will be given 14 days from the deemed date of service of the Claim Form and Particulars of Claim to respond by filing with the Court either an Acknowledgment of Service form or a defense. The defendant may dispute or assert for discharging any alleged balance. In response to this, if the creditor disputes all or part of the claim, the defendant may also bring a counterclaim against this. But, if the defendant does not respond to the service of the claim within the scheduled period, claimant can apply to the court for pronouncing a default judgment (Kelly & Hayward, 2006, p.204). After obtaining a default judgment, the said claimant can also demand to the court for the enforcement of it. But, in case of the compliance with the court order by the defendant, the Claimant will be prevented from applying a default judgment. Defended Claims with a financial value of less than £5,000 are treated as Small Claims and are usually settled by a Judge in his Chamber quickly and without formal rules of evidence. 3.2. Insolvency proceeding Insolvency proceedings allow the creditor to take the means of putting the debtor into insolvency. If the case happens to be that the debtor is a company, the consequence of such proceeding is compulsory liquidation while the effect stands as bankruptcy in case of an individual and partnership insolvency in case of a partnership transaction. 4. Enforcement Judgment & Execution is the final stage of debt recovery. Abbey & Richards (2008) opined that a civil judgment entitles the winning party to use many powerful enforcement tools which includes amongst other seizure of property and bank accounts (pp.25-28).” Many other enforcement remedies are also available at the disposal of the judgment holder. But, if the judgment holder doesn’t know how to locate these assets, the success of enforcing the judgment will be a nightmare. The most common method of enforcement is Execution of Goods. Goods are seized by a Court Bailiff and sold at public auction. “The bailiff must collect the debts due in a legal manner” (Corporate Debt, 2005). Because, a bailiff is duly bound to execute his statutory duty, violation of that may result a serious mishap in the administration of justice. County Court Judgments (CCJs) or the High Court Executions proved that they can be issued via the Lord Chancellor’s County Court Bulk Centre (CCBC) at the same day, once instructed by the client. Depending upon the amount owed, either a County Court Bailiff or High Court enforcement officer will attend in order to retrieve the debt. Of course, in the site of Business-Related Bankruptcies, (2008) provides that “[t]here are a number of alternatives for attempting the recovery of debts.” Creditors are free to decide of taking an informal debt recovery procedure which includes issuing final demands and letters, and making telephone calls and face-to-face visits. The creditor may also facilitate the debtor an opportunity to pay the amount in instalments. “A reciprocal agreement between the UK and a UK Court can enforce a CCJ (County Court Judgment) using the legal system of the other country” (Bullimore, 2008). In the absence of such agreement, a creditor can sell a debt to the agency in a given county and accordingly the debt recovery procedure will be taken place. In addition to the seizure of property or any other available means, the statutory stipulations also suggest imposing interest upon the debtor for paying to the creditor as a penalty for being liable with debt accusation. Only small businesses were entitled to claim interest before August 7, 2002. The recent legislative provisions assert that all businesses, irrespective of sizes and public sector bodies are entitled to claim statutory interest and debt recovery compensation for the late payment of commercial debts. Interest generally runs on judgment debts over £5,000 at the rate of 8% per annum. Willis & Simpson Solicitors, Star House, 155 City Road, London EC1. Dear Client, We are pleased to inform you that Willis & Simpson Solicitors has met the procedural requirements. For your kind information, having a careful analysis over the sniffer’s report , it is found that the Southdown studio owns only items nos. 2 and 4 as produced in the invoice report which worth a value of £ 9126 including VAT ( Value Added Tax). The enquiry report (Sniffer’s report) has not ascertained the existence of items nos. 1 and 3. Even then, in accordance with the legislative provision, our company likes to take the option to help you in enforcing money judgment as South down studio has not responded to the legal proceeding. On the face of the entire circumstances, there is a chance for us to file an application to the Shoreditch County Court for the enforcement of the already obtained default judgment against the debtor for the recovery of outstanding debt as well as the interests accrued arising out of the said debt. BIBLIOGRAPHY Abbey, R & Richards, M. (2008). A Practical Approach to Conveyancing. 9th ed. (revised), Oxford University Press. Bullimore, Nicola. (2008). UK Debt When Moving Abroad. Streetdirectory. Retrieved 16 February 2008 from http://www.streetdirectory.com/travel_guide/203 /debts_loans/uk_debt_when_moving_abroad.html Business-Related Bankruptcies under the Bankruptcy (Scotland) Act 1985 (As Amended) Phase 1: Scoping Study. (2008, February 11). Corporate Debt Recovery Policy. (February 2005). Charnwood Borough Council. 1-28. Retrieved February 10, 2008 from http://www.charnwood.gov.uk /uploads/1421ca4b034606864402926.pdf - County Court Repossession Made Easy. (2005). Retrieved February 13, 2008 from http://www.property-repossession.co.uk/debt-recovery.htm . Debt Collection / Debt Recovery - Getting Paid By Debtors. (2006). Retrieved February 13, 2008 from http://www.thecreditagency.co.uk/Debt_Collection.htm . Debt Management and Write Off Policy. (2007, March 8). The Council of Borough of Oswestry. 1-11. Retrieved February 12, 2008 from http://www.oswestrybc.gov.uk/ static/dynamic/DocMan2Document.asp?document_id=C5120582-417A-4E2E-84D8-08DF914350A9... Debt Recovery Guidelines Consultation. (January 2002). 1-16. Retrieved February 12, 2008 from http://www.ofwat.gov.uk/.../publish.nsf/Attachments ByTitle/debt _guidelines_2002.pdf/$FILE/debt_guidelines_2002.pdf GB Group (2007), Debt Recovery. Retrieved February 13, 2008 from http://www.gb.co.uk/ Kelly, H. & Hayward. (2006). Business Law . 5th ed., Cavendish. Protect Yourself. (2007). Retrieved February 14, 2008 from http://wales.gov.uk/topics/health/protection/immunisation/leaflets/flu-protect-yourself/?lang=en Report of the Director of Corporate Services. (5 June 2007). Sundry Debt Collection & Write Off of Outstanding Debts. Report No: 103/2007. 1-5. Retrieved February 10, 2008 from http://www.rutland.gov.uk/ppimageupload/Image52714.PDF Sime, S. (2006). A Practical Approach to Civil Procedure. 9th ed., Oxford University Press. UK Debt Recovery Agents. Retrieved February 11, 2008 from www.creditcollections.co.uk/debt-recovery-uk.htm Walton, T. (n.d.) UK Debt Recovery Procedures. TaylorWalton Solicitors. P. 4 (1-12). Retrieved February 13, 2008 from http://www.law-europe.com/documents/men_04_practice_02_04.pdf Read More
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