We understand that recovering a commercial debt can be an arduous and time-consuming process. This is why, here at MLS, we are committed to take away the stress of debt recovery from our clients so they can focus on what they do best – growing their business.
Our professional debt recovery service will not only save you time and reduce stress, but also help you improve your business’ cash flow and productivity. We will carry out the necessary procedures and chase unpaid debts for you whilst maintaining transparency at all times.
How can unpaid debts damage your business?
- Stressing over late payments can distract your attention from important business matters and reduce productivity.
- Chasing up debtors can lead to wasted time and wasted use of resources with no fruitful outcome.
- Debts can have a big impact on profits and harms cash flow and prevents further investment in your business.
Process for debt recovery
An ideal solution to recovering debt is to reach a mutual decision and avoid legal action. As a result, there are a number of steps involved in this process, so that both parties have ample opportunity to repair their relationship.
- Pre-litigation- This involves one of our solicitors sending out a personalised letter before action to the debtor, giving them a period of time to pay the debt.
- Court action- If there is no response after making communication, we will initiate legal proceedings in the County Court. The debtor could then either admit or defend the claim depending on the situation (please see below).
- Judgement and enforcement proceedings- Once judgement is obtained, the debtor will need to adhere to the terms set out by the judge and the creditor will be given enforcement options from which to choose in order to recover their debt.
Following judgement, MLS will be able to guide you on the most appropriate way to enforce the judgement taking into account the size of the debt, the relationship you have with the debtor and the length of time it will take to recover the amount owed. Our tailored approach will enable you to continue running a successful business, maintain your cash flow and avoid any damage to your reputation that could be caused by mishandling an unpaid debt.
At MLS, we look to avoid legal action as much as possible and to work towards the best possible outcome for our clients. Should the matter be taken to court, we are at hand to provide step-by-step advice and operate on a fixed fee basis, allowing you to choose the most appropriate package for your needs.
Our commercial debt recovery solicitors can help with:
- General debt recovery advice and guidance
- Debt collection for small businesses
- Bad debt collection
- Pre-action debt recovery
- Court action
- Payment agreements
- Enforcement
- Enforcement proceedings
- Insolvency proceedings
What we offer?
- Free initial consultation.
- Experience in dealing with commercial debt recovery cases.
- Fixed-fee subscription service and discounted rates.
What are the costs?
Our overall fees vary depending upon how complex your case is and what you would like us to do. For a free quote specifically tailored to your circumstances please email hello@my-local-solicitor.com or call us on 01244 478 730. We would be more than happy to discuss your case.
To give you an idea of how we charge however, and to comply the SRA price transparency rules, we have set out below details of our typical charges.
Our charges are made up of:
- our fees for the legal work; and
- ‘disbursements’ – disbursements are costs related to your matter that are payable to other people, such as fees for bailiffs. We handle the payment of the disbursements on your behalf to ensure a smoother process.
Where VAT is referred to below please note that this will be charged at the applicable rate, which is currently 20%.
Our fees
In debt recovery work the legal fees often vary depending upon how much work we need to do to recover the debt. We therefore tend to charge fees for each stage of the recovery process and only charge clients for the parts they need:
Letter before action
A Letter Before Action is a letter which formally demands payment from the person who owes you money (the ‘debtor’). This is the first step for any debt recovery process before starting court proceedings.
This is charged at a fixed cost of £550.00 (plus VAT) and includes:
- Taking instructions and undertaking appropriate searches
- Sending a letter before action
- Arranging for the payment to be made, where applicable
Some cases may be more complicated and require us to charge on a different basis and may take longer than usual. Contact us for a quote tailored to your circumstances.
Issue Court Proceedings
If the debt has not been paid following the letter of action, we will draft and issue court proceedings on your behalf. Our standard fees for issuing a court claim are below:
| Debt Value | Court Fee | MLS fee (plus VAT) |
| £3,001 – £5,000 | £205.00 | £ 350.00 |
| £5,000 to £10,000 | £455.00 | £ 450.00 |
| £10,000 to £50,000 | 5% value of the claim | £650.00 |
| £50,001 to £75,000 | 5% value of the claim | £850.00 |
| £75,001 – £100,000 | 5% value of the claim | £950.00 |
Some cases may be more complicated and require us to charge on a different basis and may take longer than usual. Contact us for a quote tailored to your circumstances.
A defendant will have 14 days from receipt of the claim form and/or particulars of claim in which to respond by filing an acknowledgement of service or a defence. If the defendant does not respond in time you can request judgment for the claim debt in default. If an acknowledgement of service is filed within 14 days of service of the claim form, the defendant then has a further 14 days to file a defence to the claim. If the defendant then fails to file a defence, judgment can be entered in default.
Court fees do not have VAT. MLS fees do not include counsel’s fee for the hearing(s) please see “disbursement” section below.
Enter Judgement
If there is no response, we may be able apply to the Court to ‘obtain Judgment’ for you. This means you would have a court order which you can enforce to reclaim your money because the claim was not responded to. Our fees would be:
| Value of Claim | Our Fee (plus VAT) |
| Up to £5,000 | £250.00 |
| Over £5,000 | £400.00 |
If we are successful in obtaining judgment for you but payment is still not received then we will advise you on the next steps at that time, such as enforcement action and what the likely costs would be (see below).
Some cases may be more complicated and require us to charge on a different basis and ma take longer than usual. Contact us for a quote tailored to your circumstances.
Defended Claims and more complex cases
If a debtor submits a defence to your claim or the case is otherwise more complicated, we will normally charge you an hourly rate for the time which we spend on your case. The hourly rate depends upon the experience of the fee earner handling the matter usually £205 per hour (plus VAT)
Timescales for defended and more complex cases are more difficult to predict. Sometimes matters can be resolved within a matter of weeks but others can take much longer. Contact us for more tailored guidance on your circumstances.
Disbursements
You will need to pay for ‘disbursements’ in addition to our costs as described above. In a debt recovery matter the most common disbursement is the Court fee and the cost for these are listed above. If we need to go to Court then a barrister (sometimes called ‘Counsel’) is often used to deal with the hearing. We will guide you on this as and when such costs need to be incurred.
Other costs to consider
The costs set out above do not include enforcement action such as for bailiffs to go out and collect the debt on your behalf.
Key stages of your case
The costs described above cover all of the work in relation to the following key stages a debt recovery process:
- Discussing your case with you and, where appropriate, reviewing documents you provide
- Performing relevant checks and searches
- Sending a letter before action (see above)
- Receiving payment and forwarding payment to you or, if a debt is not paid, drafting and issuing court proceedings
- If no response is received, applying to the Court for Judgment in Default, subject to the additional costs for doing so as detailed above being paid
- If Judgment in Default is received, writing to the other side to demand payment
- If payment is still not received within the specified timescale, providing you with guidance on the next steps and likely costs
It would not normally be necessary to undertake other work or incur costs other than those described above. However, we would be very happy to provide you with a more tailored quote for all stages of your particular case once we know about your specific circumstances.
How long will my case take?
Please see time estimates above for the timescales in each stage of the process.
In terms of the overall time the debt recovery will take, if a debt is not disputed, we find that it typically takes about 6-8 weeks from sending the letter before action (see above) to receive a Judgment in Default. A debtor with sufficient funds to do so will very often pay upon being sent the Judgment in Default and so matters can quickly be resolved after obtaining a Judgement in Default.
If the debt is disputed, defended or enforcement action is required, the matter will ordinarily take longer than this to resolve and involve additional costs which will be discussed with you in advance.
Who will be dealing with my case?
Your case will be handled by a trusted member of our experienced team who are, generally speaking, qualified as a solicitor or as a barrister. Once we know who will be handling your case for you we will introduce you to them and provide you with full details of their background and qualifications. Full details of the experience and qualifications of our team are available on our website including the types of work normally undertaken.
Regardless of who is working on your case the matter will be supervised by our principal solicitor Marta Williamson
OUR SUBSCRIPTION SERVICE FOR COMPANIES
MLS commercial debt recovery package is a service whereby we chase up to five commercial debts per month for a fixed and low monthly payment. This service equates to only £360 plus VAT pcm and includes our experienced solicitors taking your instructions and drafting up to five letters chasing commercial debts on your behalf. The said letters are not ‘letters before action’ (see above) however, they are professional, bespoke and send out to your debtors on our firm’s letterhead. We find this service very effective and it is often seen as less intrusive.
In addition, if the debt remains unpaid, all MLS commercial debt recovery package subscribers will receive10% discount on MLS’s costs should they wish to bring the matter to the court through MLS. Contact us on 01244 478 730 or email hello@my-local-solicitor.com to find out more.
