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CCJ's plummet by over one quarter despite debtor days increasing
CCj numbers have fallen by over a third and values have plummetted by nearly £300m at a time when debtor days are increasing. Customers and Suppliers are working with each other as opposed to taking recovery action that often leads to no reward.
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-
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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BCR are a highly regarded and very knowledgable firm of Licensed Insolvency Practitioners working with Limited Companies, LLP's, Partnerships and Sole Traders to mitigate and resolve the effects of Financial Difficulties using specialist insolvency and recovery solutions.