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Fees Debt Recovery
Debt recovery costs
Stage 1: Pre-action
Simple letter before action (LBA)
The letter before action details all the important information related to the claim. It is generally the final letter that is sent before legal proceedings begin. This letter will detail the value of the claim, the amount of interest that is to be paid and how long the debtor has to pay before legal proceedings will commence. The debtor will generally be allowed 7-14 days to respond to a LBA.
The fee you pay will be fixed based on the amount owed to you. Please see the bands of fixed fees below:
Value of claim | Fixed fee price |
Less than £1,000 | £50 + VAT |
£1,000 – £10,000 | £125 + VAT |
£10,000 + | £200 + VAT |
Stage 2: Issuing proceedings
Should the debtor fail to make payment following stage 1 then proceedings can be issued either through a County Court claim or a statutory demand.
County Court claim:
Sanders Witherspoon will issue a County Court claim on your behalf against the debtor. The debtor will receive papers from the Court notifying them of the legal action being taken against them. Following receipt of these papers the debtor will have 14 days to acknowledge the claim. If the debtor acknowledges the claim they will have a total of 28 days from the service of the papers to file a defence to the claim.
Should the debtor fail to settle the debt or file an acknowledgement of the claim within 14 days, Sanders Witherspoon will request that judgement be entered against them. A letter will be sent to the debtor from the court, the letter will inform the debtor of the court judgement and demand immediate payment of the debt, or face enforcement action.
At this stage we will attempt to recover court fees and a fixed amount towards your legal costs. The amounts recoverable are set out below:
Debt owed | Our fee | Court fee | Court fee + fixed costs recoverable from debtor |
Less than £1,000 | £100 + VAT | £25 – £60 | £75 – £130 |
£1,000 – £10,000 | £200 + VAT | £70 – £410 | £150 – £510 |
£10,000 – £100,000 | £500 + VAT | 4.5% of claim value | Court fee + £100 |
£100,000 – £200,000 | £1000 + VAT | 5% of claim value | Court fee + £100 |
i) Statutory demand:
Sanders Witherspoon can issue the debtor with a statutory demand, this will threaten insolvency proceedings if payment is not received. A statutory demand can be issued against an individual or a company. If issued against a company it will be an application to the Court for the company to be wound up. If it is issued against an individual it would be a petition for their bankruptcy. However, this can only be an option should the debt owed exceed the minimum thresholds; for a company the debt must be £750 and for an individual it must be £5,000.
Should the debtor fail to respond to the statutory demand within 21 days your solicitor will discuss with you the potential commencement of insolvency proceedings and discuss any further costs.
Our fixed fee for issuing a statutory demand is £300 + VAT.
Stage 3: enforcement
If the debtor has failed to settle the debt following stages 1 and 2, then Sanders Witherspoon will seek to enforce your claim against the debtor in order to recover any outstanding monies owed to you.
The most common method of enforcement is through the instruction of High Court Enforcement Officers (bailiffs). The bailiff will attempt to recover the money or sell goods belonging to the debtor in order to satisfy the debt, this is done via a writ of control. Another option that may be available is to apply for a charge against the property of the debtor, securing your interest until the property is sold.
Furthermore, it may be appropriate to issue an application to obtain information, this may be suitable if you are unsure of the debtor’s financial situation. If the application is successful the debtor must attend Court for questioning about their finances.
If the debtor is owed money by a third party then it is possible to apply for the 3rd party to make a direct payment to you rather than the debtor, this is known as a third party debt order.
Additionally, it is possible to apply for an attachment of earnings order. If granted the debtors employer is required to pay the Court weekly or monthly instalments out of the earnings of the debtor. The Court then sends the funds collected on to you as the creditor.
Sanders Witherspoon will endeavour to find the most effective and efficient solution tailored to your problem. The table below outlines our fees and other costs that are associated with different methods of enforcement action:
Enforcement action | Our fee | Court fee |
Application to Obtain Information | £100 + VAT | Court fee £55 + process server’s fee (£60 – £100 Approx.) |
Application for Warrant of Control | £100 + VAT | If unsuccessful: Court fee £66 + bailiffs fee of £75 + VAT If successful: £66 Court fee (Court & bailiff’s fee recoverable from debtor) |
Application for Attachment of Earnings | £100 + VAT | Court fee £110 |
Application for a Third Party Debt order | £100 + VAT | Court fee £110 Representation at Court – estimated at £300 |
Application for a Charging order on the debtors property | Charged on an hourly basis (an estimate will be provided based on the circumstances of the debt owe). | Court fee £110 Land Registry fee £40 Representation at Court – estimated at £300 |