Debt Recovery ‐ FAQ
- Am I Able To Recover My Legal Costs?
- Can I Claim Interest?
- How Much Are The Court Fees?
- How Much Will It Cost If We Have To Issue Proceedings?
- I Have Obtained A Judgment, How Do I Enforce It?
- What About Liquidation Or Bankruptcy As A Way Of Recovering The Debt?
- What Are The Course Fees Involved With Enforcement?
- What Is The First Step To Recover The Debt I'm Owed?
- Where Do I Enforce My Judgment?
Am I Able To Recover My Legal Costs?
The court allow you to recover some fixed costs from the debtor for issuing the proceedings, on entering judgment and on enforcement but it is important to stress that not all of your legal costs will be recoverable from the debtor.
Interest you may be entitled to claim may cover some of the shortfall in your recoverable legal costs. The court fee payable to issue proceedings will be added to the judgment obtained against the debtor.
Can I Claim Interest?
Yes, if you make a claim under the Late Payment of Commercial Debts (Interest) Act 1998 (amended by the Late Payment of Commercial Debts Regulations 2013), you have contractual terms that provide for the payment of interest or alternatively you could claim interest at the statutory rate of 8% per annum.
How Much Are The Court Fees?
The court fees to issue proceedings are:
- £35.00 for claims up to £300;
- £50.00 for claims between £300.01 and £500;
- £70.00 for claims between £500.01 and £1,000;
- £80.00 for claims between £1,000.01 and £1,500;
- £115.00 for claims between £1,500.01 and £3,000;
- £205.00 for claims between £3,000.01 and £5,000;
- £455.00 for claims between £5,000.01 and £10,000;
- 5% of the claim for claims between £10,000.01 and £100,000;
- 5% of the claim for claims between £100,000.01 and £200,000;
- £10,000 for claims more than £200,000.
There is no court fee payable upon a request for judgment.
How Much Will It Cost If We Have To Issue Proceedings?
It usually costs between £200 and £400 plus VAT for our time dealing with uncontested court proceedings including the entry of default judgment. You will have to pay the court issue fee in order to issue the proceedings. These costs may vary depending on the amount of work involved.
I Have Obtained A Judgment, How Do I Enforce It?
There are a number of options you are able to pursue to enforce a judgment and the most appropriate option would depend on the circumstances of your particular matter.
Examples of enforcement action available can include:
- An Attachment of Earnings Order (to obtain a proportion of the debtor's earnings if they are in employment);
- A Third Party Debt Order (where the debtor is owed money by a third party)
- A Charging Order (secured against the debtor's property or land);
- Instructing the County Court Bailiffs (if the judgment is under £600) or High Court Enforcement Officers to seize the debtor's goods.
What About Liquidation Or Bankruptcy As A Way Of Recovering The Debt?
The threat of insolvency can be a potent means of forcing payment. Each case is different but we will review it with you and advise whether it is the best way forward for you. You can serve a Statutory Demand under the Insolvency Act 1986 whether the debtor is a company, sole trader or partnership before you petition the Court for a Winding Up Order (if a company) or a Bankruptcy Order (if an individual). Our costs would cover the preparation of the demand and petition, arranging service and advertisement where needed and the attendance at the hearing.
What Are The Course Fees Involved With Enforcement?
A £110.00 court fee is payable in relation to the application plus an additional Land Registry fee to register an Interim Charging Order.
Attachment of Earnings
A £110.00 court fee is payable in relation to the application.
Third Party Debt Order
A £110.00 court fee is payable in respect of each third party against whom the order is sought.
Information Hearing Order
This orders the debtor to attend court to provide information regarding their current circumstances. A £55.00 court fee is payable plus a £110.00 fee for County Court Bailiffs to serve Notices of Hearing upon the debtor (per hearing).
If the debtor fails to attend the hearing and does not comply with the order this constitutes a contempt of court and they may be liable to committal to prison.
High Court Execution via a Writ of Control
A £66.00 court fee is payable to seal a writ of control to allow High Court Enforcement Officers to pursue seizing the debtors goods (if the Judgment debt exceeds £600 and is not a Consumer Credit Act claim.) The items seized are usually sold at a public auction to satisfy the debt owed.
If the High Court Enforcement Officers are unsuccessful in their enforcement efforts you will have to pay their abortive execution fees (£90 plus VAT) but if they are successful they will collect their full fees from the debtor.
Bankruptcy of an Individual or the Winding up of a Company
We can serve a Statutory Demand under the Insolvency Act 1986 which is the first step. That is a formal notice requiring the debtor to pay within 21 days failing which you can rely upon their non compliance to present a petition to the court. There is no court fee but you need to personally serve the demand. We can usually negotiate a fee for service of around £70 plus VAT with an enquiry agents to personally serve the Statutory Demand.
If the debt is not paid and it is agreed you want to proceed the fees are:
Bankruptcy of an individual: £920 Court fee for Bankruptcy Petition to include Official Receiver's deposit of £700; around £70.00 plus VAT for enquiry agents to personally serve it. Winding-Up/liquidation of a limited company: A fee to arrange an agents to personally the Statutory Demand upon the company, £1,365.00 Court fee for the Winding up Petition to include Official Receiver's deposit of £1,165; and agents fee for service of the Winding up Petition; £75.00 for advertisement in London Gazette (per hearing, per advert).
What Is The First Step To Recover The Debt I'm Owed?
We will send your debtor a letter before action to demand payment. The letter would contain details of the payment(s) outstanding, provide a deadline for payment and would threaten the issue of legal proceedings if payment is not made by that deadline. We would report back to you with the debtor's response or if no response is received seek instructions. Our fee for the demand letter and reporting back to you is £80 plus VAT. Our demand letters are forceful but professional and can be an effective means of collecting in money from debtors. The key is to act quickly and to make the payment of your debt a priority.
If you chose to instruct us to assist further, our usual hourly rates would then apply, but we would agree with you a fee estimate for that work. We are flexible on what we do dependant upon the circumstances of the case. It may be appropriate to either send a chasing letter to the debtor, enter into negotiations or issue proceedings with a view to obtaining a County Court Judgment (a 'CCJ') against the debtor and then enforce recovery.
Where Do I Enforce My Judgment?
- County Court judgments of less than £600 must be enforced in the County Court
- County Court judgments of £600 or more may be enforced in the High Court
- County Court judgments of £5,000 or more must be enforced in the High Court
- High Court judgments less than £5,000 can be enforced in the County Court
- High Court judgments (of any value) can be enforced in the High Court