How to Recover Debts Effectively
Do you need help to recover a debt?
Do you or your business have a problem with late payers? We understand that bad debts can have a devastating effect on your cash flow. We have a streamlined procedure for the recovery of bad debts and have successfully recovered many hundreds of thousands of pounds for businesses from all sectors.
We have many repeat clients in Barnstaple and throughout North Devon where we are based, as well as all over the South West and beyond.
Our debt recovery system
We offer a low-cost fixed-fee service to all of our debt recovery clients. For a nominal administration charge of just £95 plus VAT, we will send a demand letter to your debtor.
If you want a solicitors' letter to be sent on your behalf, then we can help. This is how it works:
- After you have instructed us and provided us with a copy of the invoice you want to chase, we send a demand letter to the person who owes you money, demanding that they pay the sums owed to you within seven days.
- If your debtor pays up in response to our demand letter (and in our experience, around 90% of them do), you will not have to pay any further fees to us.
- If your debtor does not pay, you can either take no further action, (in which case you would pay us nothing further), or instruct us to take further action against the debtor.
What further action can be taken against a debtor who still won't pay?
If we have sent a demand letter, and your debtor has not paid, we can advise you about the further steps you can take to seek to recover your debt.
We will always discuss the costs, risks and benefits of your options with you at the outset, to allow you to make informed, commercial decisions about how you proceed. This will include an analysis of the funding options available to you, if you do not have the funds available to pay our fees yourself.
Can I charge interest on my unpaid debts?
We will advise you about the operation of your statutory rights when collecting debts, such as those under the Late Payment of Commercial Debts (Interest) Act 1998, which allows businesses to charge each other interest at 8% plus the Bank of England base rate, after an initial 30 day period has elapsed.
Many people do not know that you are also entitled to compensation arising out of late payment of debts, ranging from £40 for debts up to £999, to £100 for debts of £10,000 or more and we will advise you about how to claim this.
I have a judgment but my debtor still won't pay
Perhaps you have already obtained a Court judgment, but your debtor will still not pay. In these frustrating circumstances, we can advise you about the most appropriate method of debt recovery for you, such as placing a legal charge on property owned by the debtor and then seeking possession and sale of the property, intercepting money the debtor might be paying to a third party, or seizing goods belonging to the debtor, to the equivalent value of your judgment debt.
Our experienced dispute resolution team understand how important it is to secure payment of debts quickly and cost effectively, and so we will always consider flexible funding arrangements with you.
How much are debt recovery fees?
This section relates to Debt Recovery matters with a value of up to £100,000. For matters with a value above £100,000 we will provide you with a tailored quote.
We charge £95 plus VAT for an initial letter on average. Thereafter, we charge £500 plus VAT on average for debt recovery work if it remains uncontested up to and including entering Judgment.
If the matter is contested, generally we charge in the range of £1,000 - £10,000 plus VAT. This estimate is an average price based on recent instructions; the actual cost to you will depend on a number of factors which we will discuss with you if you decide to instruct us.
The charge is based on our average hourly charging rate of £180.00 per hour which will vary according to the fee earner dealing with the matter.
We may use conditional fee or damage based agreements if they are appropriate for your matter, in which case you will be responsible for paying us an uplift of our normal fees, on average at around 50%. We will advise you about this in more detail at the appropriate time.
As with any matter, there may additional costs at some stage. These are fees and charges we will need to pay on your behalf as part of the process, such as Court fees, counsel’s fees and enforcement process fees. In cases which exceed the small claims limit (£10,000) the expectation will be that the debtor will pay the majority of these costs, if your claim against them is successful. However, this may not be possible in all cases and if not, you will remain liable for our costs and charges
Our people involved in doing Debt Recovery work will include:
- Jan Max Samuel (Senior Partner)
- Rebecca Parr (Chartered Legal Executive)
- Elle Brooks (Trainee Solicitor)
We understand the commercial importance of dealing with unpaid debts cost effectively. Therefore, the work we carry out will involve:
- Sending a letter before action (within 7 days of you instructing us, but usually far more quickly)
- Liaising with debtor and others in an effort to resolve matters (approximately 14 days)
- Issuing Court proceedings (within 7 to 14 days)
- Representation at any hearing (1 day)
- Consequent attendance to ensure debt paid
Our fees do not include any external costs and charges which you may incur as part of the process (eg. Damages, fines, penalties or other liabilities). You will also be responsible for these items.
What shall I do next?
If your customers are not paying, and you need a solicitor to chase your bad debts quickly and cost effectively, we can help.
Contact us for your no obligation assessment of any debt recovery matter, and to discuss how we can assist you and your business.