Hoddesdon: 01992 442911
Hertford: 01992 587065
Enfield: 020 8804 5271
Debt collection
For many years we have been instructed by Companies and individuals to collect debt. This can be a book of debts owed or can be individual debts. No job is too small. Each case is given its own attention and we will provide you with commercial advice at the outset as to whether your debt is worth pursuing. Clearly, you the client will want to know what it is going to cost you. The process below relates to non-complex invoice collection for debts up to £100,000.
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We can split this down into stages for you.
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1. A Letter Before Action – This is a pre-requisite in any case. It has to be a detailed Protocol Letter that will involve us writing to the person or business who or that owes you money in accordance with the requirements of the Civil Procedure Rules Pre-Action Protocol for Debt Claims. We will send the letter out, preferably by e-mail, to speed matters up and we will give the debtor, the person or Company who owes you money, 7 or 14 days to make payment. In the event that they do not pay we would need to move onto the next stage of the procedure. However, if we have successfully collected the debt for you, or you decide to stop at this stage we will charge you £150 plus VAT.
If there are a number of invoices being sued upon the cost may be slightly higher but we would agree this with you in advance.
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2. Negotiations - If there is a dispute over the debt and you wish us to engage in correspondence with the Debtor before issuing proceedings, then we will try to negotiate a satisfactory settlement. Again, we will give you sound commercial advice about the situation, for example whether you should proceed against a Company that is clearly insolvent on its accounts or such other steps that need to be taken.
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We would be prepared to carry out an hour and half’s negotiation for a fixed sum of £275 plus VAT. We will always inform you if this sum is likely to be exceeded so you can decide if you wish more work to be carried out. Again, you will need to consider what is involved i.e. how large the debt is and what you wish to spend chasing it. You have to consider whether you may be “throwing good money after bad”.
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Please remember that many people do not wish to become embroiled in a legal process with Solicitors and often pay up to avoid this.
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3. Issue Proceedings – If the negotiation does not prove to be successful then the next stage would be to issue proceedings. I.e. Take the debtor to Court.
There will be 2 sets of fees. Court Fees and Our Fees. They are set out on the tables below and are for undefended actions up to us obtaining a Default Judgment on your behalf.
Court Fees
Value of Debt
Up to £4,999
£5,000 to £9,999
£10,000 to £25,000
£25,000 to £100,000
Court Fee
£35-£205
£455
5% of the Value of the Claim
5% of the Value of the Claim
Our Fees
Value of Debt
Up to £4,999
£5,000 to £9,999
£10,000 to £25,000
£25,000 to £100,000
Court Fee
£300 plus VAT = £360
£400 plus VAT = £480
£500 plus VAT = £480
£800 plus VAT = £960
In the event that proceedings become defended then we do charge you on an hourly rate basis. Once again we can talk to you about the fees which need to be charged but typically our fees are as follows:
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Claims allocated to the Small Claims Track less than £10,000 in value and our fees will be approximately £2,500 to £5,000 plus VAT. Disbursements are in addition to this.
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Claims allocated to the Fast Track (typically of a value between £10,000 - £25,000) £5,000 - £15,000 plus VAT. Disbursements are in addition to this.
If a claim is allocated to the Multi Track system then we will need to review the issues involved with you and agree a cost strategy moving forwards
4. ENFORCEMENT ACTION
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We are more than happy to advise you on how to enforce the Judgment and turn the Judgment into money recovery once you have this. There are a variety of options available which include:-
a) County Court Enforcements Agents – Our fees are typically between £90 and £180 plus VAT for this. There are Court fees in addition
b) High Court Enforcement Agents (This is for debts over £600) – Our fees are typically between £90 and £270 plus VAT. There are Court Fees and a HCE fee payable in addition)
c) Charging Order to secure the debt against a property – Our costs are between £300 and £400 plus VAT. There are Court and Land Registry fees for this in addition (Total £161) and there will be Agents fees for the Court Hearing of around £100 to £125 plus VAT.
d) Attachment of Earnings Order - Our costs are between £130 and £150 plus VAT. Court Fee £110.
e) Third Party Debt Order - Our costs are between £225 and £275 plus VAT. Court Fee £110. Agents fees for a hearing will also be payable typically between £100 to £125 plus VAT.
f) Issue a Statutory Demand (A pre-cursor to Bankruptcy proceedings) - Our costs are between £130 and £150 plus VAT. In most cases the Statutory Demand will need to personally served on the Debtor so there will be fees of a Process Server which will be agreed in advance with you when the facts of the Debtor and the geographical circumstances are known.
g) Bankruptcy Proceedings - Our costs are between £700 and £800 plus VAT. There will be disbursements on top to include Court Fee (£280) Process Server (tba) Search Fees (£11) and Agents Fees for a hearing will also be payable typically between £100 to £125 plus VAT. In addition there is a deposit payable of £990.
h) Winding Up Proceedings - Our costs are between £900 and £1100 plus VAT. There will be disbursements on top to include Court Fee (£280) Process Server (tba) London Gazette Advertisement Fees (£100 approx) and Agents Fees for a hearing will also be payable typically between £100 to £125 plus VAT. In addition there is a deposit payable of £16000.
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It is important to note that where a debt is pursued for a sum under £10,000 it is unlikely any legal costs will be recoverable from the Debtor. It is also important to note that these fees and guidelines are for undefended debt claims. If the matter does become defended then our costs are calculated on an hourly rate basis and your fee earner will discuss this with you and agree a way forward.
For more information about debt recovery, contact Duffield Harrison LLP Solicitors.
Hoddesdon: 01992 442911
Hertford: 01992 587065