solicitors cheltenham

Debt Recovery

COSTS INFORMATION FOR RECOVERY OF UNDISPUTED BUSINESS TO BUSINESS DEBTS OF UP TO £100,000

The SRA's 2018 Transparency Rules require all regulated law firms, who publish as part of their usual business that they offer certain services, to supply information on the prices they charge. For pricing on other types of work, we can provide an estimate upon request.

Debt recovery for a business to business debt that is undisputed

Bad debt can be one of the most damaging aspects of business and recovering it can be a drain on time and resources. We understand this and are happy to talk to you about your unpaid invoices to give you practical and commercial advice on how to reduce the risk of bad debt before it occurs or, if it has occurred already, give you practical and commercial advice on how to recover your debts.

We understand that our clients like transparency and control as to fees so we provide tailored quotes as soon as we have an understanding of the situation you are in – the value of the debt, the position of the debtor, the length of time that has elapsed since invoicing and the steps that have been taken already to chase the debt and any payments that have been made, etc.

Quality does not necessarily come at the cheapest cost. We do not, as some firms do, price our costs as a percentage of the value of the debt to be recovered.

We have set out this guide of our pricing for debt recovery services, however the best way to get an accurate indication of price is to speak to us on 01643 707777 to give us a full appreciation of your situation and requirements.

We have several members of our team who may work on your matter, including 2 partners, Julian Maitland-Walker and Sheree-Ann Virgin whose details can be found in our People section. Either of Julian or Sheree-Ann will have overall responsibility for our work, regardless of who works on your latter. They may be assisted by more junior fee earners including paralegals, trainee solicitors or assistant solicitors. Debt recovery work can very greatly in complexity. Your inctruction will be dealt with by people whose expertise is appropriate to the task in hand.

County Court proceedings

Stage 1 – Pre-Action

  • Range of costs: £250 to £750 plus VAT depending on the complexity and value of the matter including taking your instructions, undertaking appropriate searches, sending a letter before action to the debtor requesting payment before proceedings are issued and reporting to you on any response received;
  • Assumptions: The assumptions upon which this estimate is given are: (a) that the debt is based on a single unpaid invoice which is not disputed and no negotiation is needed, that we have all of the documents and that you will cooperate in providing further information; (b) that your debtor is correctly identified and his whereabouts are known; (c) that the debt is not subject to set off or counterclaims;
  • Timescales: The usual timescales for this phase are between 1 – 4 weeks depending on at which stage payment is made.

Stage 2 – Proceedings

  • Range of costs: £600 to £1,750 plus VAT depending on the complexity and value of the matter including drafting and issuing proceedings, where no acknowledgment of service is received applying to the court for judgment in default, obtaining judgment and providing you with advice on the next steps including likely costs if payment is not received;
  • Disbursements: A court fee of between £25 and £455 will be payable to issue proceedings for debts of up to £10,000 depending on the value of the debt and whether the claim is issued online or by paper (see https://www.gov.uk/make-court-claim-for-money/court-fees). For debts over £10,000 up to £100,000 the court fee is 4.5% or 5% of the value of the claim depending on whether the claim is issued online (4.5%) or by paper (5%).
  • Assumptions: The assumptions upon which this estimate is given are: (a) that the debt is based on a single unpaid invoice which is not disputed and no negotiation is needed, that we have all of the documents and that you will cooperate in providing further information; (b) that your debtor is correctly identified and his whereabouts are known; (c) that the debt is not subject to set off or counterclaims;
  • Timescales: The usual timescales for this phase are between 2 – 10 weeks depending on the stage at which payment is made, i.e. after issue of the claim or upon receipt of judgment in default.

If the other party disputes the debt or wishes to negotiate at any point we will discuss any further work required and provide you with revised advice about costs.

Anyone wishing to proceed with a claim should note that:

  • We do not usually offer debt recovery services for debt values of less than £10,000.
  • Fixed fees operate in this area and there are limits of how much of our costs you can recover from the debtor (see here). For a debt of £100,000 where the court serves the claim form and judgment is entered on admission the recoverable costs would be just £140 whereas our costs may be significantly more than this.            
  • The VAT element of our fee might not be reclaimable from the debtor.
  • Interest and compensation or late payment fees may take the det into a higher banding, with a higher cost.

The costs quoted above are not for matters where enforcement action such as the bailiff, is needed to collect your debt. For more information on the methods of enforcement click here.

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Key stages of County Court proceedings

The fees set out above include all of the work in relation to the following key stages of a claim:

  • Assessing and advising on claim: Taking your initial instructions, reviewing the papers and advising you on the merits and prospects. This advice will be revisited theough the matter and may change.
  • Preparing a letter before action: Preparing and sending to the debtor a letter before action settng out details of the debt which you claim and the legal basis on which it is due and owing.
  • Issuing your claim: Drafting the documents necessary to commence court proceedings, including the claim form and particulars of claim, and sending those documents to the Court, so that the Court may issue and serve your claim on the debtor.
  • Requesting judgment in default: Preparing a request for judgment in default and sending this to the court. When judgment is received, sending a copy to the debtor with a request for payment.
  • Advice on next steps: If payment is not received as required, preparing advice to you on the next steps which may be taken to enforce judgment and the likely cost involved.

 

We will usually seek to recover your undisputed business to business debt of up to £100,000 debt by county court proceedings and insolvency proceedings are not, strictly speaking, a form of debt recovery. However occasionally you might seek to discuss with us the viability of insolvency proceedings. Beloe is an overview of the fees of such proceedings and we would be happy to discuss the process with you.

Insolvency proceedings

  • Range of costs: £250 to £5,500 plus VAT depending on the complexity and value of the debt including taking your instructions, undertaking appropriate searches, sending a threat to liquidate or statutory demand, bringing a winding up petition;
  • Disbursements: A petition fee of £280 will be payable to issue the winding up petition. A process server fee of around £100 will also usually be payable as will an advertisement fee of around £90 and counsel’s fees of between £150 - £500 plus VAT for attending the winding up hearing;
  • Assumptions: The assumptions upon which this estimate is given are: (a) that we have all of the documents and that you will cooperate in providing further information; (b) that your debtor is correctly identified and his whereabouts are known; (c) that the debt is not subject to dispute, set off or counterclaims;
  • Timescales: The usual timescales for this phase are between 2 – 10 weeks.

For more advice or a free consultation on Debt Recovery
Call +44 (0)1643 707777 or Email sheree-ann.virgin@maitlandwalker.com

The types of cases in which the firm acts include