Business Debt Recovery
Newtons Solicitors provide debt recovery advice and assistance for commercial organisations and individuals.
Business debt recovery can be extremely stressful for a business, no matter the size of the business or the industry in which it operates. At Newtons, our specialist commercial debt recovery solicitors provide expert debt recovery advice and assistance for commercial organisations and individuals. We work speedily and thoroughly to ensure your debt is recovered in a fast, accurate and cost-effective manner.
What is Business Debt?
Business debt, or commercial debt, is debt that is owed to a business. It’s not abnormal for businesses to owe debt, especially start-ups, but if a business is struggling or unwilling to repay debt to you, serious problems can arise.
There are many reasons as to why a business or individual may not have repaid you. For example, they may dispute the amount owed, be unsatisfied with the work provided, be struggling with funds or have entered into insolvency.
What is Business Debt Recovery?
Business debt recovery is where a business attempts to recover debts owed to them by another business or individual.
Why is the Commercial Debt Recovery Process Important?
Debt can have a crippling impact on cash flow with the additional time and effort in chasing payment eroding any remaining profit from the settlement. What’s more, outstanding debts can seriously harm your business’ reputation if it means you are unable to pay your staff and creditors. Therefore, it’s vital to begin the commercial debt recovery process as soon as possible.
Is There a Time Limit on Beginning the Commercial Debt Recovery Process?
According to the Limitation Act 1980, you can chase an unsecured debt for up to six years from when you were last in contact with the debtor or last received a payment from them. If you are chasing a secured debt, you have up to 12 years.
Expert Corporate Debt Recovery Service
Our expert corporate debt recovery service includes:
- Provision of pre-action advice and collection
The first stage of the business debt recovery process involves pre-action. Usually, this involves sending a formal letter to the debtor to request the debt repayment. At this stage, we would attempt to conclude the matter and avoid going to court. - Court proceedings
If the business debt recovery is not concluded during the pre-action negotiations, we would provide advice on County Court proceedings and seek a County Court Judgement (CCJ). - Enforcement action
If the County Court awards a CCJ and the debtor still doesn’t pay, we would advise on enforcement action. - Bankruptcy
If the debtor is insolvent, and therefore cannot repay debts, we would advise on bankruptcy proceedings or winding up petitions. - Liquidation:
If the debtor has liquidated their assets, we would advise on corporate debt recovery and what to do if the sale of assets is not enough to cover the debt owed.
Specialist Commercial Debt Recovery Solicitors
We offer a commercial debt recovery process that is tailored to you and your business needs. We take a one-to-one approach with each of our clients to ensure we advise on the best recovery methods for you.
The sooner the business debt recovery process begins, the better the chance of a successful outcome. Our highly experienced commercial debt recovery solicitors regularly achieve excellent results for clients across the business and individual spectrum.
Costs
Fees for an undisputed business to business debt
These costs apply where your claim is in relation to an unpaid invoice 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 at an hourly rate if more extensive work is needed.
| Debt Value | Court fee | Initial Letter – our fees plus VAT @ 20% | If Court action is involved to seek Judgment in Default – our fees plus VAT @ 20% |
| Up to but not exceeding £1,000 | Up to £70 | £250 plus VAT | From £900 to £4,500 plus VAT |
| Exceeds £1,000 but does not exceed £5,000 | Up to £205 | £550 to £850 plus VAT | From £900 to £5,500 plus VAT |
| Exceeds £5,000 but does not exceed £10,000 | Up to £455 | £650 to £950 plus VAT | From £900 to £6,500 plus VAT |
| Exceeds £10,000 but does not exceed £25,000 | 5% of the value of the claim | £650 to £2,500 plus VAT | From £900 to £10,500 plus VAT |
| Exceeds £25,000 but does not exceed £100,000 | 5% of the value of the claim | £850 to £4,500 plus VAT | From £900 to £15,500 plus VAT |
Anyone wishing to proceed with a claim should note that:
- The VAT element of our fee cannot be reclaimed from your debtor.
- Interest and compensation may take the debt into a higher banding, with a higher cost.
- The costs quoted above are not for matters where enforcement action, such as the bailiff, is needed to collect your debt.
- The above amounts do not include disbursements, such as Counsel’s fees (if the same should be necessary) and/or any Tracing Agent search fees which may be necessary to locate your debtor.
Our fee includes:
- Taking your instructions and reviewing documentation (within reason).
- Undertaking appropriate searches (which equates to, if Land Registry search fees are involved, up to a value of £18).
- Sending an initial letter / letter before action.
- Receiving payment and sending onto you, or if the debt is not paid, drafting and issuing court proceedings (in advance of which we shall speak with you in order to obtain your instructions).
If you require a claim to be drafted and issued then our charges will be at an hourly rate of the relevant fee earner dealing with your matter and the above table provides a range as to the likely fees. The amount of time we need to spend on a matter will depend upon the size and nature of the claim and we will discuss this with you during the progression of your matter.
If the aim is to obtain Judgment in Default (i.e. where no Acknowledgment of Service or Defence is received) then upon receiving that Order from the Court we can write to the other side to request payment.
If payment is not received within 14 days, then we will be able to provide you with advice on next steps and likely costs
If your matter is straightforward (and Court action as above is involved) then the hope would be that it may take 4 to 18 weeks from receipt of instructions from you to receipt of payment from the other side. This is on the basis that the other side pays promptly on receipt of Judgment in Default. If enforcement action is needed, your matter will take longer to resolve.
Fee earners who undertake this work and their hourly charge out rates:
Abigail Noone (Senior solicitor) £350 plus VAT
Inderjit Gill (Senior solicitor) £300 plus VAT
Ruth Cockshott (Senior solicitor) £300 plus VAT
Steve Fallon (Senior solicitor) £275 plus VAT
Daniel Hilton (Senior solicitor/Director) £225 plus VAT
Bethaney Rush (Apprentice Solicitor) £200 plus VAT
Tom Fairclough (Trainee Solicitor) £175 plus VAT
**Please note, complex or urgent transactions may attract higher hourly rates than stated above which you will be notified of in advance**.
Contact our commercial debt recovery solicitors
Please get in touch to find out how we can help. We can talk on the phone, via a video call or arrange a meeting where we can discuss your options and give you a clear idea of timeframes and costs.
Alternatively, please contact us online and we’ll call you back when it’s convenient for you.
