While the costs of any court action can be difficult to estimate, our experience enables us to provide a comprehensive and realistic estimate of debt collection fees. We are always willing to discuss the risks to your matter, agree billing timescales or even fee caps. Fees will not be incurred without your agreement to the same.
Debt Collection for small businesses where the debt is less than £100,000
At Burtons Solicitors we know that the costs to recover a debt must be proportionate to the amount owed and must take into account the circumstances of each individual client. We offer an initial free half hour interview to discuss the situation and assess the evidence. This allows us the opportunity to provide initial general advice on the risks and benefits of the options available to you.
We will always provide an estimate of the debt collection fees based on your individual circumstances, to take into consideration the complexity of the case and the paperwork involved. Please see below for a basic estimate for debt collection fees based on undisputed debts. If a debt becomes disputed, then we will advise you of any additional costs that you may incur.
Charging for Debt Collection
Debt collection matters are charged on a time spent basis. We base this on an hourly rate commensurate with the experience of the case handler, the complexity of the matter and the amount of paperwork provided.
Our hourly rates are as follows:
- Partners £245 plus VAT (£294) to £300 plus VAT (£360)
- Solicitors/Legal Executives £200 plus VAT (£240) to £275 plus VAT (£330)
- Trainees & Paralegals £120 plus VAT (£144) to £200 plus VAT (£240)
- Legal Assistants £75 plus VAT (£90)
Costs
The following costs apply only to uncontested claims. If the debtor already disputes the claim or does so at any stage of the process, then you will be given an estimate based on the individual circumstances.
All matters will involve the following initial steps:
- Reviewing the documentation you provide
- Consider the claim and possible further investigations (such as locating the debtor)
- Drafting and agreeing a Letter Before Action
- Notifying the debtor of your claim
Your total costs and estimated timescale are shown below according to how the debtor responds:
Immediate Response
Should the debtor not respond to the Letter Before Action we will send one reminder letter. If the debtor responds to the Letter Before Action, or the reminder, and pays the debt then once funds are cleared they will be transferred to you and the matter concluded. Based on a Solicitor or Partner undertaking the work on your behalf the total costs of this stage will be between £450 plus VAT (£540) and £700 plus VAT (£840). We estimate that this process would take between six to eight weeks to conclude. This depends on how quickly the debtor pays the debt and the method used to make payment.
Issuing Proceedings
If the Debtor does not respond to the Letter Before Action then it may be necessary to issue proceedings at Court. At this stage we will draft the Court Application for you, agree the same and then arrange for this to be issued. Assuming that upon receipt of the issued Court papers the debtor pays and based on a Solicitor or Partner undertaking the work on your behalf the total cost of this stage will be between £250 plus VAT (£300) and £350 plus VAT (£420) and disbursements. We estimate that this process would take a further six to eight weeks more to conclude than the Immediate Response detailed above; depending on how quickly the Court processes the paperwork, how quickly debtor pays the debt and the method used to make payment.
Requesting Judgment
If the Debtor does not respond to the Court proceedings then you are entitled to apply for Judgment in Default (a Court Order in the absence of a reply). We will prepare this application and arrange for this to be issued by the Court. Based on a Solicitor or Partner undertaking the work on your behalf the total cost of this stage will be between £50 plus VAT (£60) and £100 plus VAT (£120). We estimate that this process would take a further four weeks to then obtain the Judgment in Default, depending on how quickly the Court processes paperwork.
Enforcement
If the debtor does not pay in response to the Judgment in Default and the timescale for doing so passes, then we will provide you with the options available to you for enforcing the Judgment. Based on a Solicitor or Partner undertaking the work on your behalf the total cost of this stage will be between £50 plus VAT (£60) and £100 plus VAT (£120). It is not possible to list the actual costs of enforcement as they will vary on the method used and the necessary steps. We will provide you with a detailed estimate of the proposed fees and disbursements based on your individual circumstances and the enforcement method chosen.
Disbursements
In order to issue proceedings at Court a Court Fee is payable (no VAT on these fees). This fee is calculated on the value of the claim with fixed fees of between £35 and £455 for matters up to £10,000 in value. Court Fees for cases over £10,000 in value are calculated on 5% of the value. Court Fees are subject amendment, often on short notice and whilst we will advise you of the Court Fee you are recommended to check the up to date Court Fees by searching for form EX50 at www.hmctsformfinder.justice.gov.uk. Should your matter reach the Enforcement stage there is likely to be further Court Fees or costs associated with the enforcement process and we will advise you of these at this stage depending on the enforcement option to be used. Currently Court Fees do not attract VAT, however you will be advised if this situation changes.
VAT
Whilst we endeavour to keep our website up to date, please be aware that VAT and fees charged by external agencies such as the Courts are subject to change. You should contact our debt collection team for a written estimate.
Get in touch
If you would like more information around debt collection, you can fill out our online contact form and a member of the team will be in touch in due course. Find our contact form here.
