Limited Company Debt – What Can Bailiffs Do?
If your creditors have appointed debt collection bailiffs to collect money owed on their behalf, you will have to have a dialogue and attempt to reach an agreement with them. If, you cannot reach an agreement that is when bailiffs will likely visit your work premises in an attempt to seize goods and assets to cover the cost of the debt you owe to their clients.
Of course, when your company is going through tough financial times, with regular cash flow problems it is a stressful time for all involved and as a company director you have to look out for a potential solution wherever possible. When it comes to paying creditors and facing potential insolvency, it is imperative that you look for professional advice, before it gets to the stage where your creditors hire bailiffs to chase the debt.
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4 Key Questions on Debt Collection Bailiffs
With regards to a limited company debt, what can bailiffs do?
Let’s first look at the role of the bailiff, and from there how that relates to the debt a company owes. Debt collection bailiffs can also come under the term ‘enforcement agents’, and they are hired to work for the courts, as self-employed agents hired by specific companies, or for bailiff companies. If your company owes money to HMRC, they can appoint bailiffs to collect the debt on their behalf without having to first collect a court order to do so. There is a difference between a bailiff and a debt collector, with debt collectors having no power to gain entry to a property or to seize goods and assets.
The role of a bailiff is to at first attempt to reach an agreement of repayments with the company. As the debtor you are expected to pay back your debts, and a bailiff will request to meet you at the business premises in order to take control of goods and assets, if a repayment agreement cannot be met. In the case of entering the premises and seizing assets a bailiff must first be certified, CRB-checked and lodged security with the court for £10,000. This bond is a way of proving legitimacy, and also acts as a safety net for all parties in the event of the bailiff vanishing with any assets or monies that have been repaid.
How long do bailiffs have to collect a debt?
In order to gain entry to your work premises, a bailiff must first give notice to you. This will be via an enforcement notice, and provide you with seven days’ notice that a bailiff is to visit. In the majority of cases a bailiff will visit your premises between 6am and 9pm, but it can happen at any date or time.
Before allowing a bailiff entry to your work premises you must always ensure that you have checked their credentials, asking for identification, any certification that they hold to provide legal right of entry and seizure of goods, as well as any other documentation they have to support their cause. The very first visit from bailiffs will usually entail an evaluation of and listing of all business assets that could potentially be seized. This approach is useful in the event of asset seizure, but it also acts at the time as an encouragement to the debtors to agree repayment terms rather than risk losing assets.
In most cases a bailiff cannot force entry into business premises if they have never previously visited. There are a few instances where this is not the case though, including:
- When HMRC have hired bailiffs to enter business premises due to a court order
- High Court Enforcement Officers are involved
- Bailiffs from the County Court are involved
Are there any additional factors to a limited company debt and what bailiffs can do?
They do have the power to seek repayment terms on a debt owed, but then also to seize assets if no agreement has been reached on repayment terms. If you are a director of a limited company that has got into trouble, one thing to point out is that you are not personally liable for the debt. What this means is that when a bailiff enters your business premises in order to seize assets, they only have the right to seize goods that are explicitly owned by the company.
When a list of potential seized goods is made during the first visit to the workplace, they will be locked away potentially, but remain on site. This again, is a good time for debtors to negotiate for a repayment term that suits them, signing a Controlled Goods Agreement to continue using the listed goods. If no agreement is made at this point the bailiffs have 7-days before they have the right to seize and sell all listed goods and assets. This will take place at auction, with all money made being used to repay the debt owed to the creditor.
How can I find the right support for dealing with debt collection bailiffs?
At this crucial stage of a business heading towards insolvency it is always the best option to negotiate early, creating a payment plan with creditors before bailiffs or debt collectors are involved. Even if bailiffs are knocking at your workplace, you still have time to negotiate repayment terms and keep hold of your business assets. Remember, that should you agree repayment terms and fail to make payment, bailiffs will return and seize goods to sell at auction.
Having debt collection bailiffs enter your business life is a scary prospect, but there is help available to you. Here at The Insolvency Experts we have extensive experience in assisting businesses that are in a bad spot, aiming to offer advice and guidance on all things relating to insolvency and aiming to give you greater control over your business at this difficult time.