Commercial Debts Only
It is important to realise that this legislation only applies to a commercial debt. The debt should be one that has arisen in the course of business. Both parties should be businesses, commercial entities or public sector organisations.
Note: this does not mean that both parties have to be Limited Companies. A self-employed person/free-lancer/sole trader would be considered to be a business.
Examples of debts not covered
Examples of debts not covered would include: An employee (contrast with freelancer) who was owed unpaid wages. There would be other employment legislation that would be more appropriate. A business chasing a consumer for an unpaid bill or bounced cheque.