There are three general routes of action open to you:
- Late Payment Demands – this is a letter claiming late payment interest and compensation. You can claim interest at 8% over Bank of England Base Rate and compensation of between £40-£100 for each unpaid invoice. This is a highly cost effective way of getting a contribution to your collection costs or even covering them completely. The majority of our clients are able to recover their debts simply by having us send out a late payment demand to show that they are serious about recovering their debs.
- Statutory Demands – this can be used for debts of £750 or more. We would generally recommend sending a seven-day letter (statutory demand) demanding payment together with a draft insolvency petition to show that you are serious as a precursor to formal a formal insolvency petition. This method is particularly appropriate where you have recorded promises of payment in writing and there has been no real response from the debtor.
- Letter with draft Insolvency Petition – it is possible to start insolvency proceedings agiangs a company or individual who has failed to respond to a statutory demand. It is important to use insolvency proceedings only when all other avenues have been pursued as the debtors bank accounts will be frozen and other creditors may support the petition and take it over delaying payment to you.
If you have a debt recovery issue and would like some confidential advice from us about how best to recover what you are owed call us on 01494 730 722.
We offer a fixed-fee service for recovering debts where the case is uncontested. This is a fee of between £360 and £960 inclusive of VAT, depending upon the stage at which your debt is paid. If it is paid after we send a letter of claim, the fee is £360. If it is paid after we start court proceedings, it is £720. If we then obtain a judgment against the debtor, it is £960. Bear in mind that you will also need to pay a court fee if we have to start proceedings. The exact fee depends upon the amount of the debt and can be calculated from the information given from time to time at https://www.gov.uk/government/publications/fees-in-the-civil-and-family-courts-main-fees-ex50.
If the case is defended we then charge on an hourly rate. The typical cost of a defended small claim is £600, rising to over £10,000 for very large cases (over £50,000 in value). We will always discuss with you the likely cost of pursing a defended claim and have a strict policy of monthly billing to allow you to keep tabs on costs.
In any defended case beat in mind that you will need the services of a barrister to represent you at any court hearings. Their fees can range from around £500 for a simple hearing to over £1000 for a complex one.