Debt Recovery Costs
The costs involved for debt recovery can be hugely variable depending on several factors. The costs are affected by whether the debt is contested or uncontested and at what stage in the collection process we are able to collect the debt on your behalf.
The first stage of the process would be to issue the debtor with a letter before action at a cost of £400. If the debtor does not pay at this stage then the next step would be to issue proceedings at a cost of £850. If this then proceeds to court the court fee will be £455 for a claim up to £10,000 and our fees will be £2000 for the preparation and then £1700 to enable us to attend court on your behalf. It may be possible to recover some of your costs if you are successful, but this is not guaranteed.
Our fees are based on the amount of work and not the size of the debt. However, it should be noted that court fees differ depending on the size of the debt.
There are lots of options available at this point.
If we obtain a judgment at court for you, we would issue a statutory demand if the debt remains unpaid and is over £5000 (if against an individual- bankruptcy proceedings) or £750 (if against a company- insolvency proceedings).
A statutory demand is a written warning from a creditor and to draft this may cost £450 then a further £114 for it to be served. This may later proceed to bankruptcy proceedings which would incur further costs and potential counsel fees.
If this leads to bankruptcy or insolvency proceedings it will cost £850 to draft the petition. In order to wind up a company (insolvency proceedings) the petition fee will be £1600 and the court fee £280. To make an individual bankrupt there will be a petition fee of £990 and a court fee of £280. Each bankruptcy/insolvency hearing will cost up to £1000 a hearing for our Legal fees.
Alternatively, instead of issuing bankruptcy proceedings we can advise you on the use of Bailiffs.
The above costs assume that the debt is disputed by the debtor. If the debt is not disputed it may not be necessary to issue proceedings and an alternative approach might be a statutory demand, which is also considerably cheaper. The cost of this is set out above.
Anyone wishing to proceed with a claim should note that:
- The VAT element of our fee cannot be reclaimed from your debtor.
- Interest and compensation may take the debt into a higher banding, with a higher cost.
It is impossible to give you an accurate indication of how long it would take to recover your debt as we have encountered debt matters that have been settled in full by the debtor on the receipt of the solicitors letter and there have also been disputes where bankruptcy proceedings are necessary and consequently taken 18 to 24 months to resolve. We will do our best to advise you on the likely time scale for the circumstances of your case.
All debt recovery work will be undertaken by a member of our Commercial team. Please see the Meet the Team section of the website for details. We offer a free consultation for up to an hour to enable you to understand the process and costs involved in your matter. Further we would be able to discuss the options available, the chances of success and whether taking legal action to recover the debt is economic for you.
More information on our Debt Recovery service.