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Debt Recovery (Against Individuals)

Debt Recovery (Against Individuals) 

Our debt recovery pricing structure assumes that your claim is a standard and undisputed debt arising from unpaid invoices.

In cases of greater complexity, or if the matter becomes disputed, we will need to discuss your options with you going forward as this type of claim will not fall under our pricing structure. If you proceed to instruct us on a complex or disputed debt, we will you charge using our hourly rates:

  • Principal Lawyer – £250.00 – £275.00 + VAT
  • Senior Associate – £217.00 – £250.00 + VAT
  • Associate – £190.00 + VAT
  • Solicitor – £160.00 + VAT
  • Paralegal/Trainee Solicitor – £118.00 + VAT

To verify the likely fees of the options available to you, please click on the below options?

Who owes you money?

Individual – (Including sole trader trading as a business) 


1. Standard procedure 

The standard debt recovery process involves sending the Debtor a Letter of Claim seeking payment, issuing a claim against the Debtor if payment is not received and requesting Judgment in default. Upon obtaining Judgment, you can then seek to enforce if payment is not forthcoming.

Letter of Claim (£30 – £90 inclusive of VAT) 

We will write a Pre-Action Protocol compliant Letter of Claim to the Debtor seeking payment of the outstanding amount and any interest and fixed court costs you can claim from the Debtor (within a minimum of 30 days for an individual or sole trader). This stage may involve taking instructions from you on the amount of the debt, your payment terms and the interest to be applied (either contractual or statutory interest).

The first time you instruct us, we will charge you a fixed fee of £75 plus VAT. Subsequent instructions will be charged at a reducing rate as follows:

Number of instruction in a rolling 12 month period Our Fees VAT Payable Total Cost
2 – 10 £75.00 £15.00 £90.00
11 – 20 £50.00 £10.00 £60.00
21 + £25.00 £5.00 £30.00

N.B. The Debtor will have an opportunity to dispute the debt at this stage.

Issue Claim (£354.00 – £594.00 inclusive of VAT)

If the debt is not contested and no response is received from the Debtor, we will issue a claim against the Debtor on your behalf. The costs of issuing a Claim are as follows:

Value of Claim Our fees VAT payable Total Cost Fixed Recoverable Costs
2 – 10 £295.00 £59.00 £354.00 £50.00-£80.00
11 – 20 £395.00 £79.00 £474.00 £100.00
21 + £495.00 £99.00 £594.00 £100.00

A proportion of our charges (the “fixed recoverable costs”) can be recovered from the Debtor in the event your claim is successful.

In addition to our charges above, you will also have to pay a court fee to issue your Claim, which is also recoverable from the Debtor. The Court Fee is calculated on the value of the Claim, as follows:

Value of your claim Court fee
Up to £300 £35.00
Greater than £300, but no more than £500 £50.00
Greater than £500, but no more than £1,000 £70.00
Greater than £1,000, but no more than £1,500 £80.00
Greater than £1,500, but no more than £3,000 £115.00
Greater than £3,000, but no more than £5,000 £205.00
Greater than £5,000, but no more than £10,000 £455.00
Greater than £10,000, but no more than £200,000 5% of the claim value
Greater than £200,000 £10,000.00

Again, the Debtor will have an opportunity to dispute the debt at this stage by filing a Defence to the Claim with the Court.

Request Judgment in Default (£60 inclusive of VAT)

If the Debtor fails to pay or respond to the Claim you can apply for Judgment in Default. Our charges for applying to the Court for Judgment in Default are as follows:

Value of Claim Our Fees VAT Payable Total Cost Fixed fee recoverable
Up to £100,000 £50.00 £10.00 £60.00 £22.00-£55.00

When applying for Judgment in Default, depending on what actions, if any, have been taken by the Debtor you can recover a further proportion of our charges (the “fixed recoverable costs”) from the Debtor in the event Judgment is obtained.

Once Judgment is received we can discuss its enforcement with you.

 



2. Alternative procedure 

Alternatively, you could use the bankruptcy process to seek to recover your debt if the amount owed to you is over £5,000. This is a more expensive and aggressive approach to the standard procedure. We rarely recommend that clients use this process only in exceptional cases. Please contact us if you would like to discuss this option further. Please click this link to access details of our charges for the Insolvency process.

Individual Insolvency Procedure

When applying for Judgment in Default, depending on what actions, if any, have been taken by the Debtor you can recover a further proportion of our charges (the “fixed recoverable costs”) from the Debtor in the event Judgment is obtained.

Statutory Demand (£462.00 inclusive of VAT and other expenses)

The first step in the Bankruptcy process is to personally serve a Statutory Demand on the Debtor demanding payment of the debt. A Statutory Demand provides the Debtor with a period of 21 days in which to make payment to you or 18 days in which to dispute the debt and apply to set aside the Statutory Demand. If the debt is unpaid, and no application to set aside the Statutory Demand is made, you can rely on non payment by the Debtor as evidence of their inability to pay.

The cost of this initial stage is £462.00, broken down as follows:-

Our fees (exc. VAT) VAT payable Total Cost
Statutory Demand £300.00 £60.00 £360.00

 

Other expenses Process Server’s Fees* (exc. VAT) VAT payable Total Cost
Personal Service of Statutory Demand £85.00 £17.00 £102.00

*includes certificate of service and assumes Debtor is based in UK mainland.

Bankruptcy Petition (£3,172.00 inclusive of VAT and other expenses)

If payment is not forthcoming within the time limit specified in the Statutory Demand, then we would prepare and issue a Bankruptcy Petition on your behalf. Again, the Bankruptcy Petition would need to be personally served on the Debtor.

When issuing a Bankruptcy Petition, a Court Fee is payable together with a Deposit to the Official Receiver. Searches must also be made of the Chief Land Registrar to see whether any other bankruptcy proceedings are pending against the Debtor. If your Petition is issued, the Chief Land Registrar must will be informed by the Court and update his records accordingly.

Our fees (exc. VAT) VAT payable Total Cost
Preparing and Issuing Bankruptcy Petition £1500.00 £300.00 £1800.00

 

Other expenses Fees (exc. VAT) VAT payable Total Cost
Court Fee to Issue £280.00 Nil £280.00
Process Server’s Fees £85.00 £17.00 £102.00
Official Receiver’s Deposit £990.00 Nil £990.00

If the Debtor pays the debt following service of the Petition we would not agree to withdraw the Petition until such time as your legal costs were recovered in full, unless otherwise instructed by you.

There is a risk that if no proposals have been put forward by the Debtor at this stage, that the Debtor is unable to pay you what you are owed. This may mean that the prospect of you recovering the amount owed to you is remote. If payment is not forthcoming it is a matter for you to decide whether or not you wish to continue to petition the Debtor’s bankruptcy or withdraw the Petition so that further costs are not incurred. If the Petition is withdrawn, you will be refunded the Deposit paid to the Official Receiver, subject to a minor reduction.

Negotiations (£600.00 inclusive of VAT)

Once the Petition has been issued, you will have an opportunity to negotiate payment of the debt with the Debtor. We would advise that if agreement for payment cannot be reached that you proceed to the next stage. Our typical charges for seeking to negotiate payment by the Debtor are as follows:-

Our fees (exc. VAT) VAT payable Total Cost
Negotiations £500.00 £100.00 £600.00

The above quotation is not a fixed fee. If it becomes clear that negotiations are going to be protracted, then we will provide you with a revised fee quote at this stage.

Hearing of Bankruptcy Petition (£702.00 – £890.00 inclusive of VAT and other expenses)

If you are minded to make the Debtor bankrupt, we would instruct a barrister to attend on the hearing of the Petition on your behalf.

Our fees (exc. VAT) VAT payable Total Cost
Instructing Barrister to represent you at Hearing £500.00 £100.00 £600.00

 

Other expenses Our fees (exc. VAT) VAT payable Total Cost
Barrister’s Fee to represent you at Petition hearing* £85.00-£200.00 £17.00-£25.00 £102.00-240.00
Court Fee to withdraw Petition £50.00 Nil £50.00

The Debtor can still use the Petition hearing as an opportunity to dispute the debt. If the Debtor can show that it has reasonable prospects of disputing the debt, the Court is likely to adjourn the Petition so that the dispute can be resolved, often in a separate set of Court proceedings.

The above fee quotes are on the basis that there is only one hearing. If there are additional hearings or the hearing is adjourned, we will provide an estimate of further fees which would be incurred at that stage.

*This is an indicative cost and actual fees will be subject to quotation.

Withdrawing the Petition (£650 inclusive of VAT and other expenses)

The Petition can be withdrawn at any stage after it has been issued.

In the event that no payment proposals are received from the Debtor and it seems likely that the Debtor will go bankrupt, you may choose to withdraw the Petition before the final hearing. Withdrawal of the Petition attracts a Court Fee of £50.00, however, the Official Receiver will refund your deposit of £990.00.

Our fees (exc. VAT) VAT payable Total Cost
Withdrawing the Petition £500.00 £100.00 £600.00

 

Other Expenses Our fees (exc. VAT) VAT payable Total Cost
Court Fee to withdraw Petition £50.00 Nil £50.00
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