DMBM800340 – Time to Pay: Solicitor’s undertaking

This is not strictly time to pay but more deferred payment.

A solicitor’s undertaking may be a useful alternative to taking enforcement proceedings where

• the debtor owns, or has a beneficial interest in, a property
• the property is for sale and
• the net sale proceeds accruing to the debtor are likely to cover all or most of your debt.

A solicitor’s undertaking can also be obtained after proceedings have commenced, for example in county court proceedings as an alternative to, and to avoid the time and expense of, obtaining a charging order. Remember to include interest, which must run to the date of payment. A solicitor's undertaking has a distinct advantage over enforcement in some cases because an undertaking can include debts that are outside a court action as well as those that are subject to court proceedings. The higher debt manager must agree to your seeking a solicitor's undertaking, or agreeing to the debtor’s proposals.

Form of undertaking

Undertakings are not given lightly by solicitors and they cannot be given unless specifically instructed to do so by their client. Once given, they are binding on the solicitor, who can be sued if the actions are not carried out.

The undertaking must therefore

• be in writing on the firm's notepaper and signed in the firm's name, and
• give an unequivocal commitment, including the words ‘I undertake (or `we undertake') to pay direct to you out of the net sale proceeds, immediately following completion, the net amount accruing to my client Mr xxx, or sufficient as will satisfy the debt and interest accrued to the date of payment, if that is less …’

Monitoring the undertaking

If you receive an acceptable solicitor's undertaking, liaise with the solicitor to make sure that you receive payment when the sale is completed. If the solicitor does not comply with the terms of an acceptable undertaking, send the papers to P&S, Shipley.

Undertaking not given, or is not acceptable

Where the solicitor will not give an undertaking, or offers one in an unacceptable form, consider an alternative form of enforcement action, such as a charging order.