Bad debts are an inevitable problem in business. No doubt you will have
your own credit control procedure, but from time to time you may get ignored.
Sometimes, it only needs a “Solicitors letter” to prompt payment. We can help with this.
Occasionally it may be necessary to start a Court claim to compel your
customer to pay. Again we can help.
Now and again however your customer may simply not have the means to pay
and you will need to give careful consideration about whether to bring a claim
though the Court, in case you are just throwing good money after bad. After all it doesn’t matter how strong your
case is if your customer has no money.
We can also help with debts owed to private individuals.
How can we help?
If you send us a copy of your unpaid invoice(s) (or details of the amount of
money outstanding) together with a copy of any correspondence you have sent
chasing payment we will send a letter to the debtor demanding payment. This will usually give the debtor between 14
and 30 days to settle their debt, depending on whether or not the debtor is a business or an individual. We
charge a fixed fee for this.
If your case is a little more complicated and a meeting (or initial advice) is required so you
can explain how the debt has arisen we charge an additional fixed fee for this.
If our letter results in payment of the money due that will be the end of
the matter but if it doesn’t you will need to consider whether to bring a claim
at Court. We are able to deal with this
for you and to help you enforce any County Court Judgment if the debtor fails
to make payment even though the Court has ordered them to do so.
Typically an uncontested debt claim will take between 28 and 42 days from
the date on which the Claim is lodged with the Court to the date of the County
Court Judgment. Enforcement of the
Judgment may take considerably longer and we will advise you about the likely
timeframe as and when we reach that stage.
Sometimes a debtor will say that they do not owe the money claimed which
can make things much more lengthy, complicated and expensive but we are able to
advise you as to your options.
Debt recovery work is carried out by either Jonathan Hardiker or Suzie Fisher at our Kendal office. Their details can be found in the Our Team section of the website.
What will it cost?
Our hourly rate as of 1 January 2021 is between
£213 and £223 an hour plus VAT depending on the lawyer dealing with the matter.
STAGE 1 –
Pre-letter meeting or advice
If a meeting or advice
is required before we can send a letter we will charge a fixed fee of £100 plus
VAT for that meeting/advice.
STAGE 2 – Letter
of claim
Sending a Letter
of Claim under the Pre-Action Protocol for Bad Debts – fixed fee of £50 plus
VAT
[If a detailed interest
calculation is required, this will be charged separately and we will agree the
cost of this with you in advance].
STAGE 3 – Response
to letter of claim
If the debtor
disputes the debt, or engages in correspondence to arrange a payment plan, we will advise you of your
options including the likely costs and any further work we do will be charged
in accordance with our hourly rate.
STAGE 4 – Issuing Proceedings
If the debtor does
not pay and you decide that you want to start a Court claim we will charge a
fixed fee of £200 plus VAT to prepare the Court documents, lodge them with the
Court and arrange for them to be served on the debtor. In addition there will
be a Court issue fee to pay as follows:-
|
Claim amount
|
Court issued claim
|
Money Claim online MCOL
|
|
Up to £300
|
£35
|
£25
|
|
£300.01 to £500
|
£50
|
£35
|
|
£500.01 to £1,000
|
£70
|
£60
|
|
£1,000.01 to £1,500
|
£80
|
£70
|
|
£1,500.01 to £3,000
|
£115
|
£105
|
|
£3,000.01 to £5,000
|
£205
|
£185
|
|
£5,000.01 to £10,000
|
£455
|
£410
|
|
£10,000.01 to £100,000
|
5% of the claim
|
4.5% of the claim
|
|
£100,000.01 to £200,000
|
5% of the claim
|
You cannot make a claim online
|
|
More than £200,000
|
£10,000
|
You cannot make a claim online
|
|
|
|
|
Fees correct as at May 2021
|
|
|
STAGE 5 – Judgment or defended claim.
If the
debtor does not defend the County Court claim we will enter Judgment against
the debtor for which we will charge a further £50 plus VAT. There are no
additional Court fees to pay at this stage.
If the debtor defends the County Court claim we will advise you of your
options including the likely costs and any further work we do will be charged
in accordance with our hourly rate.
How much
it is likely to cost to be represented in a defended claim very much depends on
the circumstances of the individual case and we will provide you with an
estimate of likely costs at that stage. There will be further fees to pay to
the Court for the final hearing and any applications you make.
Please be
aware that if your claim is for less than £10,000 a defended case will most
likely to dealt with as a Small Claims Hearing.
For Small Claims it is extremely rare for your legal costs to be
recovered from an opponent, even if you win. It is not usually economic to be
represented by a solicitor in Small Claims proceedings, but we will advise you
of your options.
STAGE 6 - Enforcement
If,
despite a Judgment being entered against the debtor they fail to pay the amount
ordered we can help you try to enforce the Judgment. The various options are as
follows: –
- Writ of Control – a High Court Enforcement Officer
is instructed to seize goods belonging to the debtor. Our costs will be
£100 plus VAT and there will be a Court fee of £66 to pay. If the High
Court Enforcement Officers is unsuccessful there is further fee of £90 to
pay. If they are successful, their fees will be added to the debt payable.
This step normally takes between 8 and 12 weeks and success clearly cannot
be guaranteed - the debtor may have nothing of value.
- Attachment of Earnings Order - the Court will order the
debtor’s employer to deduct money from the debtor’s salary and pay it to
you by regular instalments. Provided the debtor can be easily found, his
or her employer is known and we do not have to attend a hearing, we will
charge £150 plus VAT. In addition
there will be a Court fee of £110 to pay. In the event that a hearing does
become necessary (for example the debtor objects) we will provide you with
an estimate of costs. The amount will depend on where the hearing takes
place, whether we deal with it for you, or whether we need to instruct an
agent. The process normally takes
between 8 and 12 weeks.
- Charging Order – this puts a
charge/mortgage on property owned by the debtor or on the debtor’s share
in the property if it is jointly owned. We will charge £350 plus VAT for
this work provided we do not have to attend a Court hearing. In addition there will be a Court fee of
£110 to pay, search fees of approximately £11 to pay and a fee of £40 to
pay when the charge is registered at Land Registry. In the event that a
hearing does become necessary (for example the debtor objects) we will
provide you with an estimate of costs. The amount will depend on where the
hearing takes place, whether we deal with it for you, or whether we need
to instruct an agent. The process
normally takes about 8 to 12 weeks if the debtor does not raise an
objection. If you then wish to seek
an Order for Sale of the
property, we will advise further and provide an estimate for this work.
- Third Party Debt Order – this is an order
requiring someone who owes the debtor money to pay that money direct to
you. We will charge £250 plus VAT for our work provided we do not need to
attend a Court hearing and there will be a Court fee of £110. In the event
that a hearing does become necessary (for example the third party or
debtor objects) we will provide you with an estimate of costs. The amount
will depend on where the hearing takes place, whether we deal with it for
you, or whether we need to instruct an agent. The process normally takes about 8 to 12
weeks.
- Order
to Obtain Information - If you do not have sufficient information
about the debtor’s financial circumstances you can apply to the Court for
an order that the debtor attend Court to be questioned. Our charges for
this will be £250 plus VAT, there will be a court fee of £55 to pay and
you will have to pay a Process Server a fee of up to £150 to serve the
order on the debtor requiring them to attend Court.
- Bankruptcy - You may also take steps to make the debtor
bankrupt or, if it is a limited company, to wind it up. Bankruptcy or
winding up are very much a last resort because they don’t usually result
in the recovery of the money owed but we will advise you about these options
and the costs involved if it becomes appropriate to do so.
