CCJ's plummet by over one quarter despite debtor days increasing

March 2, 2011 - PRLog -- According to data released by the Registry Trust in the last few days, the number of CCJ's obtained against businesses plummeted in 2010 by over one quarter.

Only 150,900 judgements were issued last year compared to 207,100 issued in 2009, whilst the value of business County Court Judgements also plummeted by nearly £300m.

This fall may surprise many at a time when a significant number of businesses are taking longer to pay their debts as a result of the recession and the resulting pressure on working capital. It shows signs of a clear change in the way businesses are collecting their debts. Could it be that the aggressive approach adopted in previous years has resulted in little or no returns for those chasing debts and so a new strategy is being used or could it be that SME's are finding themselves unable to justify the costs of trying to recover these debts or even a combination of both factors?

Kevin Lucas, an Insolvency Practitioner from BCR's Manchester office (http://www.bcr-insolvency.co.uk/business) commented "The fall is in line with what we have experienced over the last 12 months. With so many businesses operating on a knife edge, customers and suppliers are supporting each other to give themselves the best chance of getting through these tough times. This was also reflected in the drop in formal insolvency numbers announced by the Insolvency Service in February as business owners and company directors had not been forced to seek insolvency advice in the same volume as they had done in previous years".

Whether the number of CCJ's rises this year will depend upon the necessity of each customer and supplier to support the other through difficult times. Given the relatively flat economic climate predicted for 2011, it is expected there will be no more than a moderate increase over the next 12 months as businesses work out their own payment plans to avoid incurring debt collection fees and the inevitable write off that aggressive collection procedures often brings.

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