Debt Recovery Costs

Debt Recovery Costs

In an ever changing economic climate one thing that will always have a negative affect on a business is when a client, customer or contractor fails to pay for a service. At Infinite Law we provide a low cost, reliable and effective debt recovery solution. For more information about our debt recovery service call 0333 200 8773.

Should further action be required we can help you every step of the way, whether issuing legal proceedings or even bankruptcy and winding up proceedings. For more information please do not hesitate to contact us.  

Fixed price debt recovery – what does it cost? 

These costs apply where your claim relates to an unpaid invoice or invoices which are not disputed and enforcement action is not needed. If the other party disputes your claim at any point, we will discuss any further work required and provide you with revised advice about costs which might be on a fixed fee or an hourly rate. The fixed fees set out below do not include giving you any advice about your claim.

Disbursements are payments which we make to third parties arising in the course of providing our services.  VAT is charged at the prevailing rate, currently 20%.

Stage 1: Pre-action 

Letter before action

Is it a company debt or individual/sole trader?

Company – letter before action: No charge

Individual/sole trader – letter of claim: No charge

Letters before action sent to companies usually require the debtor to pay within either 7 or 14 days, but letters to individuals provide for a 30 day period in accordance with guidelines laid down by the court

Fixed fees for pre-action assistance 

Second letter of demand: £25 plus VAT 

Review and advice if response received from debtor: £50 plus VAT 

Preparing detailed reply to debtor and final demand or offer of settlement: £105 plus VAT 

Negotiating settlement/instalment plans and drafting settlement agreement: £175 plus VAT 

Pre-action advice on recovery and assistance

Fixed fees for pre-action assistance

Pre-action advice on recovery

We offer a fixed fee service to review your invoices and contract and advise you on the most effective method of recovery; the options available to you; pre action protocol requirements and your right to receive interest and compensation under the Late Payment of Commercial Debts (Interest) Act 1998.

Our fixed fee for this service is £175 plus VAT (£35)   Total: £210

Stage 2: Court action 

Court claims – issue claims

Please note the fixed fee includes the costs to issue the claim and request default judgment, if available. Once the court has served the claim a debtor has 14 days in which to acknowledge service of the claim and then a further 14 days to file a defence. After the 14-day period has expired a request can be made to the court for judgment to be entered. Our fee to draft and submit your request for default judgment is included within our fixed fee for issue.

Anyone wishing to proceed with a claim should note that:

• The VAT element of our fee cannot be reclaimed from your debtor if you are already registered for VAT.
• Interest and compensation may take the debt into a higher banding, with a higher cost.

Timescale: It usually takes the court about 10 working days to enter judgment following receipt of a request to enter judgment. 

Additional services if necessary

The price alongside the service is for our legal fees, related third party costs may also be payable for specific services.

Stage 3: Enforcement

Once judgment has been obtained, enforcement action may be needed to recover the sums awarded by the court.

We will write to the debtor demanding payment of the judgment debt and where appropriate inform the debtor of the enforcement action to be taken if payment is not made.

Our fees for these letters are:

Letter demanding payment of judgment: £20 plus VAT (£4)  Total: £24

Letter to Company Debtor warning of intention to present Winding Up Petition:

 £40 plus VAT (£8)   Total: £48

If you require a detailed advice on the enforcement options available to you we will provide that advice for a fixed fee of £75 plus VAT (£15)  Total: £90

Enforcement proceedings

Writ of control: £85 plus VAT (£17) otherwise known as instructing a High Court Enforcement Officer to seize goods in satisfaction

Related third party costs

• Court fee – £71   Total if warrant successful: £174
• HCEO fee – £90 (including VAT) payable if the warrant is not successful Total: £264

Timescale:A writ of control may be issued once judgment has been obtained but whether or not any recovery will be made depends on the debtor’s ability to pay and whether there are any assets which may be seized, or whether a repayment agreement is made. A typical enforcement by writ of control may take about 8-12 weeks from instruction. If we are required to enter into correspondence about the enforcement then the matter will no longer be treated as a fixed fee enforcement and additional charges will apply.  

Warrant of execution: £85 plus VAT (£17) 

Related third party costs

• Court fee – £83

Total: £185

Timescale: As above

Attachment of earnings: £250 plus VAT (£50)

This is applicable in cases where the attachment of earnings is obtained without a hearing or further applications/revisions to deal with debtors who have not been found or their employment has changed.

Related third party costs

• Court fee – £119

Total: £419

Time scale: An attachment of earnings order can sometimes be obtained within about 6-8 weeks of the application for an attachment of earnings order being issued by the court.

Charging order: £300 plus VAT (£60) (excluding hearing)

Related third party costs

• Court fee – £119
• Agent’s fee for attendance at court if necessary – depends on location
• Registration of charging order – £40
• Search fee – £11

Total £530 plus Agent’s fee for attendance at court

Timescale: An interim charging order can sometimes be obtained within about 2-3 weeks of application being made to court. The timescale for the final charging order will depend upon whether the debtor files an objection and if the Court lists the case for a hearing. Without any objections or a hearing it would be a further 4-6 weeks.  

Third party debt order: £300 plus VAT (£60)

Related third party costs

• Court fee – £119
• Agents fee for hearing – depends on location

Total: £479 plus Agent’s fee for attendance at court

Time scale: A third party debt order can sometimes be obtained within about 8-12 weeks of the application being issued by the court.

Order that debtor attends court for questioning/oral examination: £300 plus VAT (£60)

Related third party costsCourt fee – £119

• Agent fee for hearing if required – depends on location
• Process server – up to £150 plus VAT

Total: £479 plus Agent’s fee for attendance at court plus Process server’s fee

Time scale: The debtor will usually be required to attend court for questioning within about 8-12 weeks of the application being made.

Insolvency proceedings

Issue of statutory demand for companies and individuals: £200 plus VAT (£40)

Related third party costs

• Process server fee – up to £250 plus VAT

Total £240 plus Process server fee

Timescale: A statutory demand should only be made where the debt is not disputed for example where there is a judgment or an admission that the debt is due. A statutory demand can be prepared on receipt of instructions and is then usually sent to a process server for personal service. Personal service generally takes about 1-2 weeks via a process server.

Bankruptcy proceedings: £950 plus VAT (£190)

This is applicable to cases where the matter is determined at the first hearing, there are no issues with regards to service and is only applicable in cases whereby the debt is not disputed or if a court judgment has been obtained which has not been set aside or appealed. 

Related third party costs:

• Process server – up to £250 plus VAT
• Court fee – £302
• Deposit – £990
• Agent for hearing – depends on location
• Search fee – £11

Total: £2,443 plus Process server fee plus Agent’s fee for attendance at hearing

Time scale: A bankruptcy order can usually be obtained within about 8-12 weeks of the petition being issued by the court.

Company winding up: £950 plus VAT (£190)

This is applicable to cases where the matter is determined at the first hearing and is only applicable in cases whereby the debt is not disputed or if a Court judgment has been obtained which has not been set aside or appealed. 

Related third party costs

• Court fee – £302
• Petition deposit – £1,600
• Process server – up to £250 plus VAT
• Agent fees for hearing- depends on location
• Advertisement in London Gazette – £101.52

Total: £3,143.52 plus Process server fee plus Agent’s fee for attendance at hearing

Time scale: A winding up order can usually be obtained within about 8-12 weeks of the petition being issued by the court.

Fees where the debt is not straightforward or involves more complex issues

If the debt is not straightforward, or involves issues making it more complex, our fees will be higher than the above estimates. We will identify them at the outset where possible although they may not be apparent until some point during the above processes. In these cases, we will discuss any further work required and provide you with a revised estimate of fees as necessary. These additional costs will be based on our hourly rates.

Defended Cases

For Small Claims cases (i.e. claims with a value of less than £10,000), we can manage your case to trial for a fixed fee (excluding disbursements) of £2,500 + VAT (£500) – Total £3,000.  It will usually take between 3 and 12 months from filing of a Defence to the final hearing (depending on the court).

For claims that are destined for the Fast Track or Multi Track (i.e. complex cases or those with a value of more than £10,000), we will provide you with a clear costs estimate and likely timescales on a case by case basis.  Due to the complexities involved, costs and estimated time scales can only be given once we are able to establish what is involved. We will always provide a clear estimate based on the work that will be required.

Occasionally we will advise you to instruct counsel to advise you/represent you at Court Hearings. If we do, they will provide an estimate based on the work required. VAT is usually added to counsel’s fees (depending on whether they are registered for VAT or not).

Person Responsible for the Work

All debt recovery work is carried out by our Director Pauline Mainwaring.  Her specific experience can be seen in her individual profile.  Her qualification year is 1996 and her hourly rate is £200 per hour plus VAT @ 20%

We are happy to discuss your individual needs.