Price of Debt Recovery – Commercial Debts
Cash is King for any business. At RedKite Solicitors, we appreciate that bad debt can impact the overall financial health of any business. Additionally, we are aware that expending legal fees to recover your bad debt needs to be carefully balanced against the debt value.
We will therefore offer fixed fees for undisputed debt recovery.
Debt collecting can be distracting, particularly where you want your primary focus to be on driving your business forward. We want to help alleviate this pressure from you.
We specialise in debt recovery for all debt values, big or small
Debt Claims
The costs set out herein will apply where your claim is in relation to an outstanding debt which is not disputed.
If the debt or claim is disputed at any point, a further fee estimate would need to be provided. The further fee estimate could either be on a fixed fee or an hourly fee basis.
Stage 1 - Preaction letter of claim
The initial stage of work for an undisputed debt is generally to provide the debtor with a pre action letter of claim.
We would draft the same within 7 days of a formal instruction and following all due diligence checks being completed.
The letter would seek payment within a specified timescale. This would usually be between the period of 14-28 days.
Our fees for drafting an initial pre-action letter of claim where there is an undisputed debt would generally be between £500.00-£900.00 plus VAT.
Stage 2 – Court Claim
To issue a court claim and seek a judgment on an undisputed debt against a debtor, our fees would be between £750.00-£1,000.00 plus VAT.
The above cost would include:
- Drafting the claim form and particulars of claim (if necessary)
- Calculating interest on the debt
- File the claim with the court
- Request judgment on your behalf in the event that there is a failure by the debtor to respond to the claim
When your claim is issued, the debtor will have a maximum of 28 days to lodge a defence. If they fail to respond, you are able to instruct us to request a default judgment.
If the debtor responds to the claim, we will provide you with a further estimate for any work which could be on either a fixed fee or hourly fee basis.
Stage 3 – Enforcement
If you receive judgment in your favour due to the debtor failing to file a defence or any response to the claim, we will advise you on various enforcement options. In the event you wish to instruct bailiffs or apply for a charging order, we would charge a fixed fee between £750.00-£1,000.00 plus VAT.
Insolvency Proceedings
If we consider insolvency proceedings on an undisputed debt to be appropriate and you instruct us accordingly, we will agree to charge the following:
Statutory Demand/Demand for payment – between £500.00-£1,000.00 plus VAT
Bankruptcy or Winding Up Petition - £1,500-£2,500.00 plus VAT
Where the debtor is a limited company, a demand for payment will request payment/response between 3 working days and up to 21 days.
A statutory demand for payment (which must be made against an individual debtor) will require payment within 21 days to avoid a bankruptcy petition being issued.
In the event a winding up petition or bankruptcy petition is issued, the final date for a court hearing is dependent on court availability, but it is usually within 2 weeks – 2 months.
Other Information
- Disputed debts would fall outside of the fees we suggest above. If and when a debt becomes disputed, further fee estimates/other fee estimates would be provided which could either be on a fixed fee or an hourly fee basis.
- You may not be able to recover VAT on our fees from another party.
- Our fees are exclusive of VAT and disbursements, including court fees.
- The level of costs you could recover from the debtor will be dependent on the size of the debt, and whether you issue court proceedings or insolvency proceedings.
Disbursements (Third-Party Costs)
Disbursements are costs payable to third parties (e.g. court fees). We handle these on your behalf to ensure a smoother process.
Court Claims - Court Issue Fee (Taken from HMCTS Website)
| Value of Your Claim | Fee |
|---|---|
| Up to £300 | £35 |
| More than £300 but no more than £500 | £50 |
| More than £500 but no more than £1000 | £70 |
| More than £1,000 but no more than £1,500 | £80 |
| More than £1,500 but no more than £3,000 | £115 |
| More than £3,000 but no more than £5,000 | £205 |
| More than £5,000 but no more than £10,000 | £455 |
| More than £10,000 but no more than £200,000 | 5% of the value of the claim |
| More than £200,000 | £10,000 |
Insolvency Court Fees
| Fee | Bankruptcy Petition | Winding Up Petition |
|---|---|---|
| Court Issue Fee | £332 | £332 |
| Official Receiver’s deposit | £1,500 | £2,6000 |
| Gazette fee for advertising | £6.00 | £103.60 |
| Counsel’s fees | Between £400.00 - £750.00 + VAT | Between £400.00 - £750.00 + VAT |
| Court search fee to complete before issuing a petition | £45.00 + VAT | |
| Agents fees for service | Between Between £70.00 - £150.00 + VAT |
Enforcement Fees
| Court Cost | Fee | Any others? |
|---|---|---|
| Instruct a bailiff | £75.00 | If unsuccessful, other charges could apply which we will advice you of |
| Final Charging Order | £131.00 | Obtaining land registry documents – between £20.00-£50.00 Counsel’s fees if required to attend a hearing – between £500.00-£1,000.00 plus VAT |