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Bailiffs and enforcement officers are appointed by a creditor to recover money that they are owed by a person or a business. A creditor will usually already have tried to recover the debt without success before employing the service of a bailiff or enforcement officer to collect the debt on their behalf.
In the event of business debt, bailiffs do have the authority to take control of goods relating to your business which can be sold at auction to try to recover the amount owing to the creditor in question.
There are different types of bailiffs with varying powers so dependent on who collects the debt from you, will depend on what they can take from. However, there are some standard things you should be aware of in case a debt collector ever turns up at your business premises.
What is likely to happen?
On their first visit, bailiffs will try to establish whether you can afford to pay the debt or not. They prefer to accept payment from you rather than goods to be sold at a later date.
However on their first visit, as preparation in case the debt isn’t repaid, they are also likely to take a full inventory of the assets they would be allowed to sell. Assets that can be easily removed tend to be considered first as payment before looking into taking larger items of property which can be costly for bailiffs to remove.
If you don’t or can’t afford to pay straight away then assets will be secured at the business premises by the bailiff until they come to collect and you cannot sell or remove the assets from the premises.
If you can’t afford to pay all the debt at once, bailiffs may allow you to pay in instalments and you may be able to continue to use your assets during this time so your business can keep running. However, if you miss repayments of the debt then assets totalling the debt value will be taken as payment instead.
What can a bailiff take?
Bailiffs can only take certain items from your business when they take assets as a form of payment.
For a limited company, only items that belong to the company can be taken as the company is a separate legal entity from the directors who run it so their personal assets will not be affected.
From a limited company, a bailiff can take:
- Stock and work in progress (if they think there is value in it)
- Office equipment
- Vehicles belonging to the company
For sole traders, business debts are treated as personal debts, therefore, there is less distinction between business assets and personal assets that can be taken by a bailiff. Bailiffs can also take things belonging to you personally or jointly owned between you and a partner or another person (although are only entitled to use your share of the asset).
From individuals, a bailiff can take such as:
- Cash or cheques
- Games consoles
- Computers and tools worth over £1,350
What can’t a bailiff take?
From a limited company, bailiffs cannot take:
- Any goods they are leased or on a hire purchase agreement
- Property which is being rented
- Items that are not owned by the company (you are likely to need evidence to prove this)
- Assets essential to the business, such as tools up to the value of £1,350
- Vehicles showing a disabled badge
From individuals, bailiffs cannot take:
- Any items which are being leased or are subject to a hire purchase agreement
- Property which is being rented
- Any items which belong to someone else or a child
- Basic domestic items such as a washing machine or cooker
- Any assets used for work purposes under the value of £1,350
Can a bailiff force entry into the business premises?
High court enforcement officers a type of bailiff, have the power to enter into a business premise and can force entry on a first-time visit, even if they haven’t written a list of goods agreement.
In most situations, bailiffs will not look to break into a business premises as their aim is to speak to the company director to ensure that they are aware of the debt and assess their affordability for repaying the debt. However, if they decide they do want to enter to collect goods, they do have that power.
There is a strict set of guidelines which a bailiff must adhere too, regarding what they are allowed to take and when they are allowed to enter a premise. However, if a limited company, sole trader or partnership owes money to creditors, then bailiffs will legally be able to take certain goods and assets.
How we can help
If you have a visit from a bailiff, fundamentally it means that there are problems within the business and creditors are owed money. This can be a big worry, but we have the experience and expertise to help you through a difficult situation. Depending on the circumstances of the company, there may be rescue options available, alternatively, it might be a case of closing the company down in the most efficient manner.