Debt Recovery

DEBT RECOVERY SERVICE

Hello and welcome to the debt recovery section of our website. Here you can find out more about our debt recovery service and in particular:

The debt recovery process.
Instructing us to send a letter before action.
Instructing us to send a late payment letter.
Instructing us to send a pre-action protocol letter.
Issuing court action to recover an unpaid debt.
Obtaining a judgment (CCJ) against an individual or an organisation that owes you money.
Commencing enforcement action.
The cost of debt recovery.
Instructing us to take debt recovery action.

THE DEBT RECOVERY PROCESS

How does debt recovery work? The debt recovery process we adopt is split into 3 simple stages:

Stage 1: Letter Before Action, Late Payment Letter or Pre-Action Protocol Letter.
Stage 2: Court Action.
Stage 3: Judgment & Enforcement Action.

You can find out more about each stage by clicking on the links below:

STAGE 1 OF THE DEBT RECOVERY PROCESS

The first stage of the debt recovery process is to send a letter before action, a late payment letter or a pre-action protocol letter to the person or organisation that owes you money. You should use a letter before action or a late payment letter if you are owed money by a partnership or a limited company. You should use a pre-action protocol letter if you are owed money by an individual or a sole trader.

Letter Before Action

A letter before action is a written demand for payment within 7 days. You should use this letter (or a late payment letter) if you are trying to recovery money from a partnership or a limited company. We charge £10.00 plus VAT for a letter before action if it is sent by post. If you instruct us to send it by e-mail, our fee will be £30.00 plus VAT.

If you instruct us to send a letter before action, we will ask you to provide us with the following information:

Your organisation name.
The legal status of your organisation.
Your opponent’s contact details.
The legal status of your opponent.
Details of the amount outstanding.

On receipt of your instructions, we will send you a copy of our letter before action and a fixed fee invoice. You can pay us by bank transfer.

If the person or organisation that owes you money does not respond to our letter before action, you will be in a position to proceed to the second stage of the debt recovery process.

Late Payment Letter

A late payment letter is a written demand for payment of a debt and statutory late payment compensation within 7 days. You should use this letter (or a letter before action) if you are trying to recover money from a partnership or a limited company. We charge £30.00 plus VAT for a late payment letter if it is sent by post. If you instruct us to send it by e-mail, our fee will be £50.00 plus VAT.

If you instruct us to send a late payment letter, we will ask you to provide us with the following information:

Your organisation name.
The legal status of your organisation.
Your opponent’s contact details.
The legal status of your opponent.
Details of the amount outstanding.

On receipt of your instructions, we will send you a copy of our late payment letter and a fixed fee invoice. You can pay us by bank transfer.

If the person or organisation that owes you money does not respond to our late payment letter, you will be in a position to proceed to the second stage of the debt recovery process.

Pre-Action Protocol Letter

A pre-action protocol letter is a written demand for payment of a debt within 30 days. You should use this letter if you are trying to recover money from an individual or a sole trader. We charge £50.00 plus VAT for a pre-action protocol letter if it is sent by post. If you instruct us to send it by e-mail, our fee will be £75.00 plus VAT.

The reason for the difference in approach and in pricing (to our letter before action and late payment letter) is the Pre-Action Protocol for Debt Claims (“the Pre-Action Protocol”), which has introduced a new procedure for recovering payment of a debt from an individual or a sole trader.

The Pre-Action Protocol came into force on 1 October 2017. Its origins can be traced back to the recommendations of Lord Justice Jackson and his final report on the cost of civil litigation in England and Wales.

The Pre-Action Protocol was introduced following a consultation led by the Civil Procedure Rule Committee, which stated “A core principle of the Debt Protocol is that debtors, or alleged debtors, should be provided with sufficient information to enable them to obtain advice on their position prior to the issue of a claim”.

Consequently, the Pre-Action Protocol serves to describe the conduct the court will normally expect of prospective debt litigants prior to the start of proceedings. It applies to any business (including sole traders and public bodies) claiming payment of a debt from an individual (or a sole trader). It does not apply to debtors who are partnerships or limited companies.

The aims of the Pre-Action Protocol are set out at paragraph 2, specifically, they are to:

Encourage early engagement and communication between the parties, including early exchange of sufficient information about the matter to help clarify whether there are any issues in dispute.
Enable the parties to resolve the matter without the need to start court proceedings, including agreeing a reasonable repayment plan or considering using alternative dispute resolution.
Encourage the parties to act in a reasonable and proportionate manner in all dealings with one another (for example, avoiding running up costs which do not bear a reasonable relationship to the sums in issue).
Support the efficient management of proceedings that cannot be avoided.

The first stage of the Pre-Action Protocol is to send a pre-action protocol letter (also known as a ‘letter of claim’). This document must contain specific information, including:

The amount of the debt.
Whether interest or other charges are continuing.
Where the debt arises from an oral agreement, who made the agreement, what was agreed and when and where it was agreed.
Where the debt arises from a written agreement, the date of the agreement and the parties to it.
If the debt has been assigned, the pre-action protocol letter must provide details of the original debt and creditor, when it was assigned and to whom.
If regular payments have been offered, or paid, an explanation as to why the offer is unacceptable.
Payment details.
An address for further information and correspondence.

Certain supporting documents must also be attached to a pre-action protocol letter, including:

An up-to-date statement of account.
An Information Sheet and the Reply Form, which appears at Annex 1 to the Pre-Action Protocol.
The Financial Statement (income and expenditure form) attached at Annex 2 to the Pre-Action Protocol.

If your debtor responds to our pre-action protocol letter, there are further requirements that you must comply with:

If your debtor requests copies documents, you must provide them.
If your debtor states they are seeking advice, you must allow a reasonable period of time for the advice to be obtained.
If your debtor indicates that they require time to pay, you should attempt to reach an agreement for the debt to be paid over a period of time. When considering what is reasonable, you must take into account the debtor’s income and expenditure.
If you do not agree to payment by instalments, you are under an obligation to set out the reasons why to your debtor in writing.

If you instruct us to send a pre-action protocol letter, we will ask you to provide us with the following information:

Your organisation name.
The legal status of your organisation.
Your opponent’s contact details.
Details of the amount outstanding.
Details of the goods and/or services you have supplied.
A list of all outstanding invoices.
Details of any interest accruing on the debt.
Details of any late payment charges payable.
Details of the contract in question.
Details of any assignment of the debt.
Details of any offers to pay by instalments.
Your bank details.
An address for payment and further information.

On receipt of your instructions, we will send you a copy of our pre-action protocol letter and a fixed fee invoice. You can pay us by bank transfer.

If the person or organisation that owes you money does not respond to our pre-action protocol letter, you will be in a position to proceed to the second stage of the debt recovery process.

STAGE 2 OF THE DEBT RECOVERY PROCESS

The second stage of the debt recovery process is to issue court action against the person or organisation that owes you money.

Court Action

Court action is the issuing of a claim form. Some people refer to this as a summons.

If you instruct us to issue court action, we will ask you to provide us with the following information:

Your organisation name.
The legal status of your organisation.
Your opponent’s contact details.
Details of the amount outstanding.
Details of the goods and/or services you have supplied.
A list of all outstanding invoices.
Details of any interest accruing on the debt.
Details of any late payment charges payable.
Details of the contract in question.
Details of any assignment of the debt.
Details of any offers to pay by instalments.
Your bank details.
An address for payment and further information.

On receipt of your instructions, we will send you a copy of the claim form and a fixed fee invoice. You can pay us by bank transfer.

If the person or organisation that owes you money does not respond to court action, you will be in a position to proceed to the third stage of the debt recovery process.

STAGE 3 OF THE DEBT RECOVERY PROCESS

The third stage of the debt recovery process is to obtain a judgment and commence enforcement action.

Judgment

A judgment is a court order requiring an individual or an organisation to pay a sum of money within a certain period of time. Some people refer to a judgment as a CCJ.

If you instruct us to obtain a judgment, we will ask you to provide us with details of any payments you have received from the individual or organisation that owes you money. We will then obtain a judgment for the outstanding balance.

On receipt of your instructions, we will send you a copy of our request for judgment and a fixed fee invoice. You can pay us by bank transfer or alternatively, by cheque.

We do not require you to complete a form to instruct us to obtain a judgment.

Enforcement Action

Enforcement action is a collective term used to refer to a number of different processes by which an individual or organisation can be forced to pay a sum of money ordered by the court.

There are various methods of enforcement action available, including:

For debts under £600.00, we are, in the first instance, likely to recommend an application for a warrant of control. For debts over £600.00, we are likely to recommend an application for a writ of control.

We also offer debtor tracing and book debt realisation services.

HOW MUCH DOES IT COST?

Our debt recovery service is based upon our fixed fee pricing structure and you can find out more about our charges by viewing the Price List page on our website.

We do not charge any set up fees or retainers, there are no commission charges, no percentage charges and no hidden extras.

HOW DO I INSTRUCT YOU?

To access our services, you will need to open an account. You can do this by completing the form on the open an account page of our website. On receipt of your application, we will set you up as a debt recovery client and then contact you to explain what will happen next. Alternatively, for general enquires, please contact us. If you would like to speak to one of our advisors, please call: 0151 650 6908. We very much look forward to working with you.

USEFUL LINKS

Chartered Institute of Credit Management

Money Claim Online

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