Debt Recovery Solicitors.

Debt recovery is the process of pursuing payments of unpaid debts owed by an individual or a business.

In England and Wales, the debt recovery procedure is usually conducted through the courts. Depending on the size of the debt, your debt recovery case will be issued a ‘track’ by a judge. There are three types of track:

1. Small track – for claims below £10,000
2. Fast track – for claims between £10,001 to £25,000
3. Intermediate – for claims between £25,000 and £100,000
4. Multi-track – for claims over £100,00

If debt claims are particularly complex, they can be assigned a different track than expected. For example, a particularly complex claim below £10,000 can be assigned to the fast track if the judge thinks it necessary.

You can find out more about the tracks in our Fixed Recoverable Costs blog.

The debt recovery process is broken up into four stages:

1. Pre-action. The claimant sends a pre-action letter or letter before action. Letters before action require the debtor to pay within 14 days if they are a business, or 30 days if they are an individual.

2. Issuing the claim. If the individual hasn’t paid the debt within the time outlined in the pre-action letter, you will need to issue the claim formally. Depending on how much your claim is for, you will need to issue it in the county court or high court. 

3. Acknowledgement. Once the court has processed your claim and served it on the debtor, the debtor will have 14 days to file an acknowledgement with the court. Once acknowledged the debtor has 28 days from the date the claim form was served on them by the court (not from the date it was acknowledged) to send a defence.

4. Enforcement. If the debtor still hasn’t paid, you will have to bring enforcement proceedings. There are numerous proceedings which you can use to enforce proceedings. Some examples of enforcement proceedings include a writ of control, warrant of execution and bankruptcy proceedings. A debt recovery will identify which set of proceedings you’ll need to bring to recover your unpaid debt.

If a debt is paid after acknowledgement, you won’t need to enforce the judgement.

It’s impossible to say how easy it will be for you to recover any owed debt without knowing more details about your specific case. However, to give an idea, factors that impact how easily you can recover debt include:

• The amount of debt owed
• The willingness of the debtor to repay the debt
• Whether you have to adopt enforcement proceedings to reclaim the owed debt

For more complicated debts, it’s worth arranging an intial consultation with one of our debt recovery solicitors to understand your current situation from a legal perspective and your available options. To arrange an inital consultation please call our solicitors on 020 3007 5500.

We are currently unable to offer legal aid in any capacity as we lack the necessary legal aid certificate. We also don’t offer pro bono property law work at present.

The debt recovery fees below are split into court fees and our professional fees. We don’t offer fixed fees on debt recovery matters and the actual fee incurred for your matter may differ significantly from the fees below if your case is not straightforward.

In many cases, it may not be worth paying professional fees to recover smaller sized debts. Our debt recovery solicitors will always advise you on the risks of doing so at any consultation.

Issuing the claim:

*Please note court fees are pro-rated based upon the value of your claim. Claims below £5,000 will incur fees between £35 and £205.

The fees quoted exclude enforcement and are exclusive of bailiff fees or equivalent services.

Enforcement:

*Should a hearing be required, additional fees will be payable.

Depending on who is working on your case, our hourly rates are as follows:

Senior solicitors                    £400 plus VAT per hour
Solicitors                                £275 plus VAT per hour
Trainees and paralegals      £175 plus VAT per hour
Administration                      £150 plus VAT per hour

Charges are made in increments of 1/10 of an hour, or for every 6 minutes spent on your matter, rounded up.

The stages below are indicative of the work involved in a standard debt recovery claim from issuing a letter before action to enforcement. Depending on your matter, not all of the stages may be applicable.

• Taking your instructions and reviewing the documentation
• Undertaking appropriate searches
• Sending a letter before action
• Receiving payment and sending onto you, or if the debt is not paid, drafting and issuing a claim
• Where no Acknowledgment of Service or Defence is received, applying to the court to enter Judgement in default
• When Judgement in default in received, write to the other side to request payment
• If payment is not received within a set number of days, providing you with advice on the next steps and likely costs
• Pursuing the claim in court and assembling your case
• Once a favourable result is achieved, applying for enforcement if necessary

No two debt recovery matters are the same, and several factors affect how much your case will cost.

Cost variables include

• The size of the debt
• Whether or not the debtor has the capability to pay their debt
• The need for enforcement if the debtor chooses not to pay
• The terms and conditions within any written contract
• The conduct of the parties
• Any aggravating factors, e.g. is there any fraud involved or any other offences

There are several disbursements payable during debt recovery, which range from £25 to £10,000 depending on the size of your claim.

Please see the ‘Average Costs’ section above for a full outline of all applicable court fees.

The length of time a case takes will depend on the complexity of your matter. For straightforward cases that settle after a letter before action, it may only take 1-2 weeks.

However, for cases that proceed to the County or High Court, the time frame for your case could be anything from 6 months to 2 years from start to end.