Westbury Collections – Securing Voluntary Charging Orders for Schools

Outstanding school fees can sometimes involve substantial sums of money, and there will inevitably be cases where a parent or debtor simply does not have the means to repay the full balance immediately.

However, an inability to pay today does not necessarily mean that a school should accept that the money will never be recovered.

Where a debtor owns property or land, Westbury Collections may be able to help the school secure the outstanding debt against that asset through a Voluntary Charging Order.

What is a Voluntary Charging Order?

In appropriate circumstances, a debtor may agree voluntarily to provide security for the money they owe by allowing a legal charge to be registered against property or land that they own.

Rather than the school continuing to hold a substantial unsecured debt – potentially for many years – the outstanding balance can therefore be secured against an identifiable asset.

This can be particularly valuable where the debtor accepts that the money is owed but simply does not have sufficient available funds to settle the balance immediately.

For example, a parent may owe a school £30,000 in outstanding fees but be unable to raise £30,000 in cash. However, they may own a property with sufficient equity.

Instead of simply agreeing to a long-term payment arrangement and leaving the school's debt unsecured, it may be possible to agree that the outstanding balance is secured against the property.

Why might a school consider this?

A Voluntary Charging Order can provide an alternative route in cases where conventional collection activity is unlikely to produce immediate payment.

It can potentially:

• Provide security for a substantial outstanding debt

• Reduce the risk associated with a long-term repayment arrangement

• Give the school a stronger position where immediate payment is not possible

• Provide an alternative to simply writing off a difficult debt

• Avoid the need for contested court proceedings where the debtor is willing to cooperate

• Allow the debtor additional time while still protecting the school's financial position

Depending upon the terms agreed and the legal documentation put in place, repayment may then take place at an agreed future point, for example following the sale or refinancing of the property.

Not every debt needs to be resolved immediately

There can sometimes be pressure to reach an immediate conclusion on an outstanding account – either collect the money, commence legal proceedings or consider writing the balance off.

But where there is a substantial asset in the background, there may be another option.

A debtor might not have £20,000, £30,000 or £50,000 sitting in their bank account today, but they could have significant equity in their home or another property.

In the right circumstances, securing the school's position can therefore be more commercially sensible than demanding a payment that the debtor simply cannot make.

Westbury can manage the process

Westbury Collections can discuss the circumstances of an individual case with the school and explore whether securing the outstanding balance may be appropriate.

Where the debtor is prepared to cooperate, we can work with the parties to progress the necessary arrangements and documentation for the proposed security.

The objective is simple:

To turn an unsecured school debt into a secured position wherever the circumstances allow.

For schools dealing with significant historic fee arrears, this can provide another potential recovery strategy when straightforward demands for payment have reached their limit.

Do you have a case that might be suitable?

If your school has a substantial outstanding balance where the debtor owns property or land but is currently unable to make payment in full, speak to Westbury Collections.

We can review the circumstances with you and consider whether a Voluntary Charging Order could provide a practical way of securing the money owed to your school.

Contact Westbury Collections to discuss a case with our team.