Frequently Asked Questions around Debt Recovery

You are entitled to claim interest on outstanding debts as from the date the debt became due. Interest is calculated at 8%.

If the contract is business to business you will be able to claim 8% above Bank of England base rate.

If your contracts and invoices are of a commercial nature (i.e. if they are from your business to another business) you will be able to claim compensation.

If the debt is below £1,000.00 you are entitled to £40.00, if it is between £1,000.00 and £10,000.00 you are entitled to £70.00 and if it is above £10,000.00 you are entitled to £100.00.

If you’re claiming below £5,000 then you are only entitled to fixed costs (see fees chart).

If the claim is above £5,000 and defended then all of your reasonable legal fees can be recovered from the debtor. Your fees will be included in the amount of debt owed to you which is specified by the Judge in the CCJ.

It doesn’t sound as if the client is planning to pay their debt at all. We would advise that you instruct us to send them a letter demanding that they pay within 7 days or otherwise we will proceed with a Statutory Demand or issue Court Proceedings against them.

If they don’t pay then, as long as the debt is for over £750 and is not disputed by your client, a quick way to try to resolve the matter would be to proceed with a Statutory Demand against them. This tells them that if they fail to pay within 21 days we will start proceedings to wind them up or make them bankrupt. This often encourages the debtor to pay quickly. For more details contact the Debt Recovery Department.

Alternatively you can start a County Court claim against them and pursue them through the courts in this way. If your claim is successful then you will get a Judgment against them setting out how much they owe you. Often companies pay the debt to get rid of the Judgment from their records otherwise you can use the Judgment to enforce the debt against them. Again please contact us for further details.

No, you don’t.

You can start bankruptcy or insolvency proceedings without having taken court action; however, a CCJ will make things easier because it will show that the debt is uncontested (see information on Bankruptcy and Insolvency for further details).

Under County Court Rules it is recommended that you should send an Letter of Claim to the debtor in order to make them aware of your intentions and to give the debtor a final opportunity to pay warning that if they do not Court proceedings will be commenced.

No, it doesn’t.

The type of business (sole trader, partnership, limited company, etc) may have an impact upon the likelihood of recovery; however, we are happy to take your instructions in relation to any kind of business and advise you of the appropriate steps to take.

This very much depends on the actual size of the debt.

Often a letter from a solicitor is sufficient to secure payment from your debtor. Should you have high volumes of non-paying clients then it may be possible to arrange a discount on our Letter of Claim service so please don’t hesitate to contact us.

If your supplier has got their solicitors involved then you should take action as soon as possible as if you don’t respond they might start a claim against you.

Firstly you should write to both the supplier and their solicitors advising that you have already paid for the service and giving them proof of how and when you paid.

You should ask them to contact you before taking any further action but can also assure them that if they do issue a claim against them then you will be defending this.

If your debtor is a business then the winding up of its affairs will be being dealt with by an administrator.

The administrator will work out what assets the company has and how much can be paid out to its debtors, if anything. To find out the name of the administrator you can contact Companies House who will be able to assist.

You should then write to the administrator registering the details of your debt with them so that they can include this when they come to divide up the assets. If the debtor is an individual then their bankruptcy will be being dealt with by the Official Receiver or an Insolvency Practitioner and again you should contact them to register your debt to make sure it is included should there be any assets to be distributed.