NOTE: The Insolvency Experts can offer specialist advice to company directors dealing with bailiffs in regard to business debt. If you are an individual who is seeking advice on matters related to bailiffs, we would recommend seeking guidance from the Citizens Advice Bureau, available here.
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Can a Bailiff Refuse a Payment Plan?
Owning a company is hard and stressful work. If you have found your business has entered financial difficulty, the last thing you want to deal with is a bailiff.
A bailiff visiting your work premises can be scary, and you will wonder what items and assets they will take as payment and how long the whole process will take. There is a chance, even at this stage of proceedings, to negotiate payment terms with the bailiff, with a view to paying back your debt to the creditor and keeping hold of your company assets in the process, but, can a bailiff refuse a payment plan?
What rights does a bailiff have when negotiating debt?
First, let us take a look at the role of the bailiff. A debt collection bailiff (sometimes known as a High Court Enforcement Officer) is hired either by the courts, bailiff companies, or by specific companies as a self-employed bailiff.
In many cases, bailiffs are instructed to seize goods and assets from companies after a court order, but in some cases where HMRC is creditor, a bailiff can be hired to seize goods without a court order. A bailiff can collect on company debts including:
- Court Fine
- High Court Judgment
- Magistrates’ Court Fine
- National Insurance and VAT
- HMRC Debt
- VAT Arrears
At first, a bailiff will have to provide you with an enforcement notice. This gives you seven days’ notice that your premises will be visited. This visit can take place any day of the week, though in most cases the visit will take place on a weekday between 6am and 9pm.
Always check that a bailiff at your door has correct identification and certification documents. On the first visit to your property, a bailiff will make a list of all potential assets to be seized, but also give you time to negotiate a payment plan that suits the creditors they’ve been hired by.
Can a bailiff refuse a payment plan?
If you have granted peaceful entry into your business premises when a bailiff first visits, and can agree a repayment plan there and then, they are likely to leave any potential seizures for another time, with items locked away safely on the premises.
This controlled goods agreement provides authority to the bailiff to take control of your goods and assets, to list them, but also to allow you to keep hold and use of them, whilst you repay the debt under the newly agreed terms. Any missed or late payments under this new agreement will mean an immediate return by the bailiffs to seize the listed goods.
Only ever agree to repay on terms that you can afford. A bailiff may well refuse a payment plan if you have multiple debts to multiple creditors, but in the majority of cases they will give reasonable time to those willing to offer reasonable and structured repayment on the owed money.
Are there additional charges involved in dealing with bailiffs?
Another factor to remember is that when you first receive a notice of enforcement, you can contact your creditors to seek repayment terms directly with them. It is not too late to do so. Once bailiffs have entered your premises, extra charges will apply:
- £75 for the case being sent to the bailiffs
- £235 if initial letter is ignored and you are visited
- £110 for your goods to be seized and sold at auction
- Additional costs for secure storage of assets
*All of the above costs relate to debts of under £1,500. For any debts above that figure, a percentage of the debt owed will be paid every time a bailiff enters your premises.
Are you allowed to refuse a bailiff entry?
If, when a bailiff arrives at your property, your doors are locked, a bailiff cannot legally enter unless you invite them inside. They can, however, legally gain entry should a back door be unlocked, a garage or a shed, where potential assets to be seized could be kept. In extreme cases, a court order can give bailiffs legal permission to force entry, via the cutting of padlocks, chains and forcing a door open.
Once inside, a bailiff can stay as long as is necessary to ensure that a comprehensive list of goods and assets is made, and that a seven day notice period is given to come back to collect those seized goods and sell them at auction.
There are a few things that bailiffs do not have a legal right to do, including entering your premises between the hours of 9pm and 6am. They cannot climb over walls and fences or through windows to gain entry to the property, and they are unable to force past you at the door if you answer the door but refuse entry. Bailiffs can only seize company assets, items and goods that belong to the company owing the debt. If you’re director of a limited company, your own assets cannot be seized.
If you are in financial difficulty and owe money as a business, it is important to have a full understanding of bailiffs and the powers they have. Here at The Insolvency Experts, we have a wealth of knowledge relating to all aspects of insolvency, business debts and the process of seizing goods that bailiffs undertake on behalf of those owed money by businesses.
If your company needs further advice, please feel free to contact our team. You can reach us via telephone or email to speak to us today.