Selling your debt.

If you have customers that owe you money and you cannot be bothered to collect it, you could use the services of factors or a Debt Collection Agency.

You can sell your right to interest, compensation and debt recovery costs or transfer them to a third party.

If you assign your debt you must inform the debtor in writing giving the debtor the name, address and contact details of the third party that the debt has been assigned to. The third party can then pursue the debtor through the courts.

If you sell your debt you must inform the debtor in writing giving the debtor the name, address and contact details of the third party that the debt has been sold to. If you do not, even though the contract between you and the third party is not void only you will be able to pursue the debtor through the courts.

Most debt collection agencies charge commission for collecting the debt. Sometimes the interest and compensation due under the Commercial Debts (Interest) Act 1998 as amended by the Late Payment of Commercial Debts Regulations 2002 (SI 2002, No. 1674) can cover or can be offset against the commission charged for collecting the debt. If you decide to employ a debt collection agency you should look at the terms and conditions of at least 3 before you decide which agency to enter into a contract with