Debt judgments against businesses falls to 7-year low
The number of county court debt judgments against businesses in England and Wales has fallen to its lowest level for seven years.
Figures compiled by the Registry Trust show there were 42,091 county court judgments (CCJs) recorded against businesses during the first six months of 2016, a year on year fall of 19%.
The total value of CCJs was £149m, a decrease of 12%. As the total number and value of CCJs fell to its lowest since before the financial crisis, the average value rose by 8% to £3,550.
The trends for CCJs against corporate and non-corporate businesses were broadly consistent, but the average value of a CCJ against a generally smaller unincorporated enterprise fell 5% compared with a 19% increase for a judgment against a corporate.
The number of high court judgments fell by 50% compared with the first half of 2015 to 33. With the total value rising 36%, the average value increased 27% to £644,000.
Registry Trust Chairman Malcolm Hurlston said: “Up to Brexit businesses have been doing consistently well. This has been a long and cautious spell of recovery.”
The falling figures suggest that British businesses have been steadily recovering from the financial crisis of 2007 and 2008. However, the increasing willingness of firms to seek advice about debt recovery and take early action to ensure prompt payment has also been a significant factor.
A letter from a solicitor is often enough to secure payment of overdue invoices and, of course, there are several other legal steps that can be taken up to and including court action.
The vote to leave the EU will create some uncertainty for many businesses so it is important to monitor late payments very closely and take action as soon as possible to avoid debts building up to a dangerous level.
Please contact Gavin O'Donovan if you would like more information about the issues raised in this article or any aspect of debt collection and credit control.