Enforcement officers, more commonly known as bailiffs, can be appointed by anyone to recover the amount of money that they are owed.
If they are unable to recover the full cost of the debt including any interest and extra fees, bailiffs have the authority to take control of your goods to sell at auction in order to recover the amount.
Please be aware that there are several different types of debt collectors and bailiffs, each with slightly different powers. Here, we have outlined the main things that you should be aware of as a limited company director.
If you’re having problems with bailiffs then call us today on 0800 975 0380.
What happens when a bailiff visits?
On their first visit, enforcement officers are likely to start by taking a full inventory of the goods that they would be allowed to sell in the eventuality that the debt isn’t repaid.
They have full authority to do so in the case that the amount cannot be repaid (the items that are exempt from their control are outlined below).
However, in the first instance, this is likely to be a tactic to shock you into acting quickly to recuperate as much of the debt as you possibly can.
In some cases, using this method in the first instance is likely to be unlawful, because their first port of call should be to establish whether the money can be repaid before threatening any assets (personal or otherwise).
They should ensure before they start looking at assets that they are justified in doing so.
Remember that it is much easier for them to yield the creditor’s money from you than to add the extra step of removing your goods and selling them at auction; however many threats they make, they would rather accept payment than goods.
Bailiffs taking your property
Although taking your property is a last resort for the bailiffs, the method of starting by cataloguing your belongings is also the safest from their point of view.
Once the items have been written down by the bailiffs, they are listed as controlled goods, and you are unable to remove them from the premises.
They may be secured at the property by the enforcement officer, or if you have agreed to pay the full amount in instalments, you may be allowed to continue using the goods on the condition that you sign a controlled goods agreement.
If you later miss payments, the items may then be taken.
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What can the bailiffs take?
Debts owed by businesses that are run by sole traders have personal liability, meaning that the director can be made personally responsible for any amount their business has failed to pay. Limited company directors, however, enjoy limited liability.
They are allowed to take:
– Certain company owned assets, even if jointly owned with another party
– Vehicles that have a high value and are not on finance
– Items that are not essential to the business or in use
They are not allowed to take:
– Anything you have hired or haven’t yet paid for in full
– Items that are not company owned; however, this is up to you to prove by showing evidence of a monetary transaction
– Assets essential to business i.e. tools or books, up to a value of £1350
– Vehicles showing a disabled badge
If a bailiff has taken assets that are not company owned, but you were unable to prove this on the day, then once they have taken control of the goods you have 7 days to provide proof of ownership.
Limited company owners are not personally liable for their business debts, and only company assets can therefore be taken by bailiffs, unless the debt being called upon has been personally guaranteed by the director.
In this case, certain (non-essential) personal assets may be taken, but again, nothing that is on finance.
Get our FREE guide to dealing with bailiffs here
Can bailiffs force entry?
Certain types of bailiffs are able to force entry to business premises only.
If the address they are attending is residential, a bailiff is never allowed to enter forcefully, unless they are there to evict you from the premises or they have entered the premises before.
Please be assured that it is rare for bailiffs to force entry to business premises; in our vast experience, it has very rarely happened.
This is because they are required to bring the matter to the director’s attention; if they are not in the building, the bailiffs will not have fulfilled their purpose just by breaking entry and seizing goods.
In this instance, bailiffs are most likely to re-attend during business hours in order to speak to the company director, rather than break into the premises.
What do I do when a bailiff turns up?
We would highly recommend knowing what to expect and what they can and can’t do in your situation; this will dictate your options.
If there are children or vulnerable (for example, disabled) adults present, bailiffs aren’t allowed into the property, neither are they allowed to enter between the hours of 9pm and 6am.
However, keep in mind that not letting enforcement officers into your property they may take goods from outside that are owned by you – for example, your car.
This is the reason that we advise our clients to go outside and lock the door behind them if the address is residential; this way, you are able to prove that the vehicle is not company owned.
In the instance that you decide to engage with the enforcement agents, always ensure they you check their identification before proceeding.
At least one of the officers present are required to carry an enforcement agent certificate, so you should ask to see this and take a contact telephone number from them, along with a detailed breakdown of the amount you owe.
You can check that that the certificate they show you is genuine online by searching for them on the register of certificated bailiffs.
Lastly, always ensure that you receive a receipt for any money you hand over, and if you have agreed on a payment plan, ensure that you have the agreed figures in writing.
Never agree to pay more than you can afford – rest assured that it will come back to bite you if your payments default.
Next steps
If you’re having problems with bailiffs or need help with fixing your company debt problems then give me a call on 0800 975 0380 or email me [email protected]
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