4. Policy Detail

Debt arrangements

The Finance Department will review and monitor outstanding debt on a regular basis to ensure timely and effective recovery.

A detailed review of aged debt will be undertaken with the Assistant Director – Finance on a quarterly basis, assessing recovery progress, identifying emerging issues and agreeing any required actions.

The actions set out below will be taken to support the recovery of outstanding debt.

Debt Recovery Process

The Council will follow the process below to support the timely recovery of outstanding debt and ensure consistent, fair, and transparent treatment of all customers.

Step 1. Issue of Monthly Statements

• The Finance Department will issue monthly statements to all debtors outlining any outstanding balances.

Step 2. Initial Contact

• Finance will contact the debtor by email and/or telephone to discuss the overdue amount and encourage prompt payment.
• Individual debtors are responsible for informing Finance of any changes to their contact details to ensure effective communication.

Step 3. Reminder Notices

• 30 Days: A first reminder letter will be issued when an invoice remains unpaid 30 days after the invoice date.
• 60 Days: A second reminder letter will be issued after 60 days, restating the outstanding amount and requesting immediate settlement.
• 90 Days: A final reminder letter will be issued at 90 days. This letter will:
  • Request immediate payment.
  • Advise that legal action may be taken without further notice if payment is not received within 7 days.

Step 4. Escalation and Legal Action

• If payment is not received within the 7-day period stated in the final reminder, the Council will initiate legal recovery proceedings.
• Before legal action is progressed, Finance will liaise with the relevant service department to determine whether any operational actions may support resolution (e.g., suspending services or moving to a pay-as-you-go arrangement to prevent further debt).

• The Council does not apply interest or late fees during its internal recovery process.
• Once legal action begins, statutory interest will be applied from the invoice date in line with:
  • Judgments (Interest) Act (NI) 1971
  • Late Payment of Commercial Debts (Interest) Act 1998
• Any interest and court fees will form part of the recoverable amount.

Step 6. Repayment Arrangements

• In exceptional circumstances, the Council may agree a repayment plan with the debtor.
• Arrangements require approval from the Assistant Director – Finance.
• Standard repayment periods will normally not exceed 6 months.
• Extensions beyond this period will only be granted where deemed necessary and appropriate; such exceptions do not create a customer entitlement.
• If a debtor defaults on any instalment, the remaining balance will automatically proceed to legal recovery without further notice.

Step 7. Disputed Invoices

• Where an invoice is disputed, all recovery action will pause.
• Service departments must investigate disputes promptly and provide Finance with all required information.
• Once resolved, recovery actions will restart from the appropriate stage of this process.

When a debt reaches 90 days from the invoice date, the debt will be classified as doubtful, and a provision will be made for that debt within the Council’s accounts.

Equality, Fairness, and Data Protection in Debt Recovery

The Council will apply its debt-recovery procedures consistently and without discrimination.

All debtors will be treated in a fair and professional manner, and recovery action will follow the Council’s established processes, in line with statutory equality requirements.

The Council will handle all debtor information in accordance with data-protection legislation.

Personal data will be used only for the purposes of billing, recovery, and the administration of accounts, and will be stored, processed, and retained securely in line with the Council’s data-protection policies and statutory requirements.

Bad Debt Write offs

No debt will be written off as a bad debt unless all reasonable steps have been taken to recover the amount.

A debt can only be written off if it falls into one of the following categories:

a) The debtor has gone into administration or liquidation and there is a letter from the administrator / liquidator that no dividend is going to be paid to unsecured creditors.

b) The debtor has been declared bankrupt and has no funds available for unsecured creditors.

c) The debt is older than the statute of limitations (6 years) and court proceedings have not commenced within the 6 years.

d) A debtor has moved premises and all attempts to trace have proved unsuccessful.

e) The costs to be incurred in pursuing the debt outweigh the potential benefits.

f) Legal or statutory barriers prevent recovery, including situations where court action has been dismissed or further legal action is not permitted.

g) The debtor is deceased and all reasonable enquiries indicate that no estate exists from which the debt can be recovered.

The authority to write off individual bad debts is determined by the following thresholds:

A report of all debts written off will be presented to the Corporate Resources, Policy and Governance Committee at least annually, summarising the debts written off during the year and confirming all reasonable steps in accordance with the Council’s procedures have been taken to recover the debt.