Bailiffs and Limited Companies

• Licenced Business Rescue Experts
• Helping Directors in Debt
• Same Day Advice

Bailiffs and enforcement officers hold a certain degree of authority and have special jurisdictions that allow them to collect debts from businesses and individuals through a variation of means.

If you are a business owner of a limited company worried about bailiffs or are in the process of dealing with them, we can offer you advice on what your options and your rights are in your situation.

If you are an individual who is seeking advice on matters related to bailiffs, we would recommend seeking guidance from the Citizens Advice Bureau. 

Contents

• What is the role of a bailiff?
• What is a bailiff enforcement notice?
• What do you need to check for when a bailiff arrives?
• How do bailiffs deal with Limited Company debt?
• What are bailiffs prohibited from doing?
• How should I deal with the debt owed?
• What are my rights against bailiffs?
• How can I find support for dealing with bailiffs?

 

What is the role of a bailiff

Bailiffs and enforcement officers are individuals with special jurisdictions that enable them to reclaim debts from a limited company through a distraint. They are appointed by a creditor to recover money that they are owed from a business. Ordinarily, a creditor will have unsuccessfully tried to recover the debt before employing the service of a bailiff or enforcement officer to collect the debt on their behalf. 

What type of debts do bailiffs collect?

Bailiffs can’t be enlisted to call on any and every type of debt – there are different procedures depending on the claimant and source of debt. Bailiffs can be employed to chase various kinds of debt, such as:

• Business rates
• CCJs
• High Court Judgements
• Court fines
• HMRC arrears
• Business rent

When it comes to dealing with bailiffs, it is useful to ask them which type of debt they are calling with regards to before you grant them access, allowing you time to identify the issue and the claimant. For example, a HMRC bailiff will only visit in regards to a debt owed to HMRC themselves.

What is a bailiff enforcement notice?

If you have failed to settle a debt, you may receive a Bailiff Enforcement Notice indicating that an Enforcement Officer will visit your commercial premises to collect the outstanding amount. A bailiff enforcement notice is usually issued by enforcement officers who are authorised by law to collect outstanding debts on behalf of creditors, including county courts.

If you fail to act on the notice of enforcement, the enforcement officers can visit your business premises within seven days. The first, most important thing to do when you receive an enforcement letter is to check whether the enforcement officers are valid and then, whether you have any outstanding debt.

Take the time to ensure that the enforcement letter includes all of the necessary details. If the notice has errors, you can file a complaint and wait until a new notice is sent. The bailiff enforcement notice can only be valid if it is:

• Written in an acceptable legal style;
• Showing your correct contact details, name and address;
• Sent to you in the form of a letter through email, fax, post or, if there’s no letterbox, pinned to your front door;
• Showing the correct amount of debt owed;
• Coming from a certified enforcement officer.

 

Can a bailiff force entry?

If a bailiff arrives at your property and your doors are locked, a bailiff cannot legally enter unless you invite them inside. You can refuse entry of a bailiff through a number of measures.

They can however, legally gain entry should a back door, a garage or a shed be unlocked where potential assets to be seized could be kept. In extreme cases, a court order can give bailiffs legal permission to force entry via the cutting of padlocks, chains and forcing a door open.

In most cases, a bailiff cannot force entry into business premises if they haven’t previously visited there. There are a few instances where this is not the case though, including:

• When HMRC have hired bailiffs to enter a business premises due to a court order;
• Where High Court Enforcement Officers are involved;
• Where Bailiffs from the County Court are involved.

 

These instances can however, also differ if you are a sole trader dealing with bailiffs.

 

What do you need to check for when a bailiff arrives?

It is important to remember that if a bailiff presents themselves at your property, you should ensure that:

• The debt they are chasing is correct
• The correct process has been followed
• The notice has been given to you in the right way 
• The right time frames have been allowed before the intention to visit (usually 7 days from the date on the notice)

 

Always take the time to ascertain whether they are certified by checking the Ministry of Justice Bailiff Register and checking the identity of the bailiff by asking to see:

• Identity proof like an enforcement agent certificate, ID card or a badge;
• The identity of the firm they work for;
• Contact details such as office number and email address;
• A comprehensive breakdown of the outstanding debt and the claimant.

How do Bailiffs deal with Limited Company debt?

If you are a director of a limited company that has got into trouble, remember that you are not personally liable for the debt. When a bailiff enters your business premises in order to seize assets, they only have the right to seize goods that are explicitly owned by the company – the company is a separate legal entity from the directors who run it therefore, personal assets will not be affected.

A bailiff is also unable to take control of any assets belonging to a third party, such as assets subject to hire purchase or finance agreements. 

If your creditors have appointed debt collection bailiffs to collect money owed on their behalf, you will have to attempt to reach an agreement with them. If you cannot reach an agreement, this is when bailiffs will likely visit your work premises in an attempt to seize goods and assets to cover the cost of the debt you owe to their clients.

When it comes to paying creditors and facing potential insolvency, it is imperative that you look for professional advice before it gets to the stage where your creditors hire bailiffs to chase the debt.

What can a bailiff legally take from my business premises?

If a business is not able to pay their debt in full, a bailiff is entitled to take control of goods to sell at auction which will raise enough money to cover the debt and any interest, plus the bailiff’s fees. They must however, have the correct authorisation such as a Writ of Control or a Warrant of Execution.

On their first visit, they may inspect your premises and draw up a list of assets that they believe will cover the value of the debt. They can also include items that are outside your work premises which belong to the business. The items on this list will then become controlled goods, meaning that you can’t sell them, remove them or give them away.

There are certain regulations that govern what a bailiff can and cannot take from your home or workplace. A bailiff can only take items that belong to the company, including: 

• Money
• Stock
• Office equipment and machinery. 

 

They can also take things from outside your property (such as your company motor vehicle/s) and can add an amount on top of the existing debt.

If you have granted peaceful entry into your business premises when a bailiff first visits and can agree a repayment plan there and then, they are likely to leave any potential seizures for another time, with items locked away safely on the premises.

How long do bailiffs have to collect a debt?

In order to gain entry to your work premises, a bailiff must first give notice to you. This will be via an enforcement notice, and it will provide you with seven days’ notice that a bailiff is to visit. In the majority of cases, a bailiff will visit your premises between 6am and 9pm, but it can happen at any date or time.

 

Additional charges when dealing with bailiffs

An important factor to remember is that when you first receive a notice of enforcement, you can contact your creditors to seek repayment terms directly; it is not too late to do so. Once bailiffs have entered your premises, extra charges* will apply, including:

• £75 for the case being sent to the bailiffs
• £235 if initial letter is ignored and you are visited
• £110 for your goods to be seized and sold at auction
• Additional costs for secure storage of assets

 

*All of these costs relate to debts of under £1,500. For any debts above that figure, a percentage of the debt owed will be paid every time a bailiff enters your premises.

What are bailiffs prohibited from doing?

There are a few things that bailiffs do not have a legal right to do. They include:

• Entering your premises between the hours of 9pm and 6am.
• Climbing over walls and fences or through windows to gain entry to the property.
• Forcing themselves past you at the door if you answer but refuse entry.

There are only certain instances whereby bailiffs are able to force their way into your home or business premises, these are when they are collecting: unpaid criminal fines, income tax, stamp duty and HMRC debts (once the court’s permission has been obtained). However, the use of force is only employed as a last resort. 

How should I deal with the debt owed?

Even if you owe the amount indicated in the bailiff notice, you can still challenge it. This may not be the ideal alternative however, if you wish to stop enforcement officers from visiting you.

If you can afford to settle the debt, contact the bailiffs to pay. Such a decision will not only stop officers from visiting your premises but will also save you from incurring additional fees. If you pay, ask the enforcement agency to send you an official receipt indicating that you have settled the debt in full- you may need to produce payment proof in the future.

If you cannot settle the whole amount or you are not in a position to agree on a settlement plan at the time you receive the notice, you can contact us at The Insolvency Experts for further assistance. Our financial specialists and attorneys will help you to negotiate with the enforcement officers to either allow you to pay a small amount for clearance, or pay in installments.

In this scenario, do not allow them to access your premises. You can stop bailiffs from accessing your premises or taking some of your items by:

• Locking or parking your vehicle in a garage or far away from your premises.
• Closing and locking all doors.
• Informing all occupants not to allow the enforcement officers to access the premises.

Can a bailiff refuse a payment plan?

Only ever agree to repay debts on terms that you can afford. A bailiff may well refuse a payment plan if you have multiple debts with multiple creditors but, in the majority of cases, they will allow time to those willing to offer reasonable and structured repayment of the money owed.

What are my rights as a Limited Company against bailiffs?

Pursuing rights against bailiffs in the UK can be a confusing process. A wide range of strict procedures governs bailiffs’ rights. Despite this, your rights as a Limited Company are clear – you can refuse initial entry to your business premises and can challenge any debt.

If you ask a bailiff to leave, they must. Unless they have a Court Order, you can deny them entry to your premises. If a bailiff attempts to take anything from your premises without proper authorisation, they can be found guilty of harassment.

To safeguard your bailiffs’ rights, ask them to indicate the type of debt they are collecting for and to provide comprehensive details about the outstanding arrears. Do not grant them access on their first visit in order to provide you with sufficient time to identify the claimant and the amount owed.

If you are behind with your payments and concerned you might encounter problems with a bailiff, contact our team immediately. You increase your chances of keeping bailiffs at bay if you contact us at the start of your financial troubles.

 

How can I find support for dealing with bailiffs?

At this crucial stage of a business heading towards insolvency, it is always the best option to negotiate early, creating a payment plan with creditors before bailiffs or debt collectors are involved. Even if bailiffs are knocking at your workplace, you still have time to negotiate repayment terms and keep hold of your business’s assets.

Here at The Insolvency Experts, we have extensive experience in assisting businesses that are involved with bailiffs, aiming to offer advice and guidance and to give you greater control over your business at this difficult time.

Get in touch today to find out how we can help you through this process.