Debt Recovery Costs Explained

Our Team

Our Debt Recovery team have extensive experience of recovering debts for our commercial clients.  We understand the importance of reducing aged debts and improving cash flow for your business and we will therefore act promptly in commencing action on your behalf to recover money you are owed.

Our team of qualified solicitors and specialist executives aim to deliver the highest quality service.  We recognise the importance to our clients of regular communication and you will, therefore, have frequent updates on the progress of your claim.  Our team will be on hand to answer any queries you may have.

For more information in respect of the experience and qualifications of our Debt Recovery team, please click below:

Understanding our Charges for Debt Recovery

These costs apply where your claim is in relation to an unpaid invoice for a specified sum which is 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 if necessary, which could be on a fixed fee (e.g. if a one-off letter is required), or an hourly rate if more extensive work is needed.

The steps and timescales set out below are those which apply to a matter that does not have particular complications.  If your matter does have such complications, we will always inform you immediately and will discuss the potential consequences both in respect of the chances of success and the potential costs

Key Stages in the Claim

There are 2 main stages within the debt collection process:

Stage 1 – Letter Before Action

This involves:

  • Taking your instructions and reviewing documentation
  • Undertaking appropriate credit searches
  • Sending a letter before action
  • Receiving payment and sending onto you
  • Updating you and answering your queries whilst the matter is ongoing

If stage 1 is unsuccessful it may be necessary to issue court proceedings which is Stage 2

Stage 2 – Court Proceedings

This involves:

  • Drafting court papers and issuing your claim at court
  • Where no Acknowledgment of Service or Defence is received, applying to the court to enter Judgment in default
  • When Judgment in default is received, writing to the other side to request payment
  • If payment is not received within 14 days, providing you with advice on next steps and likely costs
  • Updating you and answering your queries whilst the matter is ongoing

Timescales

Stage 1

We will send a Letter Before Action within 3 working days of receiving your formal instructions.  Matters usually take 2-3 weeks from receipt of instructions from you to receipt of payment from the other side.

Stage 2

Where Stage 1 and Stage 2 are required judgment in default or on admission usually takes 6 – 8 weeks from receipt of your formal instructions.  If the debtor pays promptly following judgement this takes one to 2 weeks thereafter.  If enforcement action is needed, the matter will take longer to resolve.  If enforcement is needed we can discuss further costs with you.  The costs set out for Stage 1 and Stage 2 do not include enforcement proceedings.

Explanation of Costs and Fees

Debt Value up to £1,000

Stage 1 – £75 (plus VAT of £15)

Stage 2 – £125 (plus VAT of £25)

Debt Value £1,001-£5,000

Stage 1 – £100 (plus VAT of £20)

Stage 2 – £180 (plus VAT of £36)

Debt Value £5,001-£10,000

Stage 1 – £150 (plus VAT of £30)

Stage 2 – £250 (plus VAT of £50)

Debt Value £10,001 – £25,000

Stage 1 – £180 (plus VAT of £36)

Stage 2 – £350 (plus VAT of £70)

Debt Value £25,001 – £50,000

Stage 1 – £250 (plus VAT of £50)

Stage 2 – £450 (plus VAT of £90)

Debt Value over £50,001

Stage 1 – £300 (plus VAT of £60)

Stage 2 – £600 (plus VAT of £120)

For debts of over £100,000, or where the debt is disputed, please contact our team of experts on 01743 248545 or mail@hatchers.co.uk for a bespoke quotation.

Expenses

If Stage 2 is required there is a fee payable to the court for the issue of court proceedings.  The fee depends on the value of the debt and can range from £35 for a debt of £300 to 5% of the debt in claims of £10,000 or more.  For more information on the level of fees imposed by the courts please see here

Speak to a Team Member

Call a member of our Debt Recovery team on 01743 248545 to hear more about our services