Have you written off any invoices in your accounts in the last six years or obtained a Judgment against a debtor and not yet enforced it as there did not appear to be anything to enforce against at the time?
Have you looked to see whether your aged debtors' financial positions appear to have improved?
A debt has a life span of six years. Therefore, even though they have been written off in your accounts as a bad debt, this does not necessarily mean you cannot pursue it at a later date.
A Judgment has a primary life span of six years too. However, there are circumstances that you enforce it even over that six year period.
It may have been that at the time you were seeking payment, your debtor’s financial position was impecunious. It may have been that at the time you obtained the Judgment and sought to enforce it, the situation was bleak and recovery failed.
However, have you looked recently to see if things appear to have improved? If, the financial and recovery position is now very different upon enquiry, you may be able to take steps and seek to recover that written off invoice or to enforce that Judgment debt now as well, even if it is over six years old.
Our client obtained a Judgment in March 2009 against four defendants. At the time, all property identified was registered in two of the defendants' names. They were made bankrupt by another creditor shortly afterwards.
Eight years passed and upon enquiries made, debt recovery information was uncovered that showed two of the Judgment debtors were beneficial owners of properties under a Declaration of Trust and their financial position had, in fact, significantly improved.
Following a successful application made to court, enforcement steps were taken and suddenly the debtors became interested in reaching a settlement.
A very satisfactory settlement was achieved for the clients who were over the moon as they thought they would never see their money.