Debt recovery record mirrors recession

A RECORD total of business debts have been recovered by Denison Till, with the law firm claiming it shows businesses are resorting to legal action faster to secure money they are owed.

A total of £136,834 in undefended debts was recovered by the firm’s debt recovery unit in July, a record since the specialist team, led by partner Johanne Spittle, was created 20 years ago.

The money – which excludes defended debts where people contest that they owe the money claimed – was secured following a range of legal action from solicitor’s letters to full court proceedings.

Ms Spittle said: “This is the highest single-month recovery figure for our unit by some way over the last 20 years and shows that, in the economic downturn, people are holding onto their money for as long as possible.

“Businesses are also taking action against customers more quickly to recover funds. The trend is that debtors are paying – albeit it late – and usually on the receipt of a solicitor’s letter.

“Unlike the last recession we are finding that businesses are keen to keep trading and to avoid court proceedings and, in spite of the gloomy statistics about record insolvencies, we are making record recoveries for clients, the vast majority of which are in Yorkshire.” 

York-based Denison Till said that the debt recoveries in July were for a range of business clients, mostly privately-owned SMEs including commercial property landlords, plant hire firms, builders merchants and allied trades, exporters and, among the professions, surveyors, vets and accountants.

Ms Spittle added: “Debt recovery is a good economic barometer and we remain very optimistic about the Yorkshire economy.

“While the level of activity which we are experiencing shows that more businesses are having to use lawyers to recover their debts, the good recovery rates are very positive.”