Our
Debt Recovery Service – What we will do for you
1. A letter before action will be sent to your debtor demanding payment of the outstanding debt within 7 days. The letter will inform the debtor that if payment is not received Court proceedings will be commenced and a claim will be made for the costs and interest incurred. Our charge for sending the letter before action is detailed in our Debt Recovery Fees and Charges leaflet.
2. If the debtor pays then obviously that is the end of
the matter and our file is closed. You will only have had to pay our fee
for sending the letter before action.
If the debtor responds by disputing the debt we can assist in negotiating
settlement or you can deal with the dispute yourself (please note that our
charges for undertaking negotiations are not included in our fixed fee charging
structure and will be charged at the relevant hourly rate).
If the debtor fails to pay within the time limit then (provided we have a completed Debt Instruction Form) we will automatically commence Court proceedings against the debtor. The Claim Form will be drafted so the amount due to you will be claimed. At this stage we will invoice you for the Court Fee and Solicitors Costs which this action incurs as detailed on our Debt Recovery Fees and Charges leaflet. The amount of the Court Fee and Solicitors costs are both fixed by the Civil Procedure Rules and although we will invoice you for these they will be recoverable from the debtor. At this stage, interest is also claimed. For further information about this please see our leaflet Interest on your Debt.
3. Once the claim has been issued by the Court, the debtor will receive a Claim Form and Response Pack. The debtor must respond to the Claim Form within 14 days from the date which the Court deems this to have been served on the debtor.
The debtor may:-
• Admit the debt and either pay in full or offer to pay by instalments. If payment is made in full after the date the claim has been issued by the Court then the debtor must also pay the costs incurred and the interest claimed. If instalments are offered then you can decide whether or not you will accept this. If instalments are accepted then we can apply for a Judgment to pay by instalments and monitor the instalments on your behalf. If instalments are not accepted then the Court will have to make a decision as to the rate of payment based on the debtor’s financial situation (a Court hearing will usually be scheduled to decide this issue and you should note that if a hearing is to be attended by my firm our charges for dealing with this are not included in our fixed fee charging structure and will be charged at the relevant hourly rate).
• File an Acknowledgement of Service. This gives the debtor an extra 14 days in which to respond to the Claim Form.
• File a Defence to the claim. This means the matter is disputed and may proceed to a hearing for the Court to decide the outcome, unless settlement can be reached in advance of the hearing. When a matter becomes defended it is passed to our litigation department who will advise you as to our charges for proceeding with the matter at the time.
4. If the debtor ignores the Claim Form and does not respond within the time limit, then we will automatically apply for a County Court Judgment against the debtor. At this stage further costs are incurred which will be invoiced to you. Again, these charges are recoverable from the debtor and detailed on our Debt Recovery Fees and Charges leaflet. Interest is also claimed at this stage, details of which can be found in our leaflet Interest on your Debt. The Court will issue the Judgment on our application and send a copy of this to us and the debtor.
5. The next step is to enforce the Judgment obtained. As part of our automated debt recovery system, at the same time as applying for Judgment, we will automatically apply to enforce the Judgment by way of either the County Court Bailiffs or the High Court Enforcement Officers. We use the County Court Bailiffs to enforce Judgments of up to £1,000 and the High Court Enforcement Officers to enforce Judgments over £1,000.
County Court Bailiffs (Judgments up to £1,000) - When the bailiffs are instructed they will attend the debtor’s address to try to recover the amount you are owed to include all costs and interest. They will seek to obtain payment in the first instance, but will seize any goods of value belonging to the debtor which can be sold at auction to pay your outstanding debt, if payment is not forthcoming. The bailiff can only seize goods belonging to the debtor, so if the debtor is a limited company then only goods belonging to that company can be seized, not the personal goods of the individual directors. It takes between 4 and 6 weeks from the bailiff being instructed to us receiving a report on their findings. However, in some cases (particularly where the bailiff is having problems meeting with the debtor) it can take even longer. It may therefore seem as though there is a delay at this stage of the proceedings but this is not unusual. We will regularly chase the bailiffs for reports on progress and keep you informed. The Court Fees and our charges incurred at this stage are detailed on our Debt Recovery Fees and Charges leaflet.
High Court Enforcement Officers (Judgments over £1,000) - The High Court Enforcement Officers work in the same way as the County Court Bailiffs – they will make attendances at the debtor’s address to seek payment or seize goods to satisfy the outstanding Judgment and the costs and interest incurred. This works on the same time scale and again we will regularly chase for progress reports and keep you informed. The Court Fees and our charges incurred at this stage are detailed on our Debt Recovery Fees and Charges leaflet.
Please note that if the Bailiffs or High Court Enforcement Officers recover any monies on your behalf they have to hold this at their office for a statutory period of 14 days. This is in case Bankruptcy/Insolvency issues arise. Also, if the High Court Enforcement Officer is collecting instalments on your behalf they will usually wait to recover all of the monies owed in full before accounting to us.
6. If the Bailiffs or High Court Enforcement Officers are not successful then alternative methods of enforcement will need to be considered.
If the Bailiff or High Court Enforcement Officer is unsuccessful because the debtor is not at the address provided and you do not know where the debtor is, then we have enquiry agents who can assist in tracing the whereabouts of the debtor. If the debtor is traced then the Bailiffs or High Court Enforcement Officers can be re-instructed. The charges for this are detailed on our Debt Recovery Fees and Charges leaflet.
If the Bailiff or High Court Enforcement Officer is unsuccessful because the debtor does not have sufficient assets to satisfy the Judgment then it is possible to apply to the Court for an Order to Obtain Information. The purpose of this procedure is to obtain as much information about the debtor’s financial situation as possible. An application is made to the Court and the Court then issues the paperwork and sends the necessary documentation to this office. We then have to arrange for the debtor to be personally served with the documents issued by the Court. The documents inform the debtor that he must attend Court on a fixed date and time to complete a questionnaire about his financial situation before a member of the Court staff.
Provided the debtor attends, we will then be sent a copy of the debtor’s answers, which may reveal alternative methods available to enforcement the Judgment (ie if the debtor provides details of his/her employment it may be possible to obtain an attachment of earnings, or if the debtor reveals that he owns property then it may be possible to apply for a charging order). Equally, the answers may reveal that there are no other methods of enforcing the Judgment obtained (ie if the debtor is unemployed and does not own any property/assets). If the debtor fails to attend Court, then he will be in contempt and liable to imprisonment for a short time. The Court Fees and charges incurred in taking this action are detailed on our Debt Recovery Fees and Charges leaflet.
7. The alternative methods of enforcement of the Judgment are as follows:-
• Attachment of Earnings – This is effective only in the case of an individual who is employed. The Court may, on application, make an Order that weekly/monthly sums be deducted by the debtor’s employer and paid by the employer into the Court office. For this to be successful we will need full details of the debtor's employment. If you do not have details of the debtor’s employers then this information is something that the debtor would be asked to supply if we applied for an Order to Obtain Information as detailed above. The Court Fees and charges incurred in taking this action are detailed on our Debt Recovery Fees and Charges leaflet.
• Third Party Debt Order (previously called Garnishee Proceedings) - if the Court has made a judgment asking a Defendant to pay you over £50.00 and someone owes the Defendant money or is holding money for him or her, you can ask the Court to order that person (“the Third Party”) to pay you to settle your outstanding judgment. You usually use a Third Party Debt Order to stop the Defendant taking money out of his or her bank or building society account. The money you are owed is then paid to you from the account. You can also send a Third Party Debt Order to anyone who owes the Defendant money. A Third Party Debt Order only “freezes” money in an account on the date the Bank or Building Society receives that Order. It does not freeze money paid in later and the Defendant will know that the account is the subject of a Third Party Debt Order. If their account is overdrawn on the day the Bank receives your Order, no money will be frozen. So you should try to time your application so there is likely to be as much money as possible in the account. Bear in mind that accounts used to pay in monthly salaries may empty very quickly if the Defendant has standing orders or direct debits to pay out. The Court Fees and charges incurred in taking this action are detailed on our Debt Recovery Fees and Charges leaflet.
• Charging Order - this method is most commonly used where the debtor owns his own property and there is sufficient value over and above any Mortgage or other charge to satisfy the Judgment. This information is very often supplied by the debtor if we apply for an Order to Obtain Information. This method of enforcement does not in most cases produce the money quickly as the Charge obtained is generally obtained on the debtor's house and is therefore not satisfied until the debtor sells the property. If there is no other way of recovering the debt, although the Charge may not instantly produce the money, it does give the security in that you know you will receive payment in due course. It is possible to apply for the Charge to be enforced by way of an Order for Sale, but this can be an extremely costly exercise and therefore should only be used where the claim involves a very substantial amount of money. The Court Fees and charges incurred in taking this action are detailed on our Debt Recovery Fees and Charges leaflet.
8. Insolvency proceedings can be taken against a debtor If the standard County Court debt recovery service does not prove successful, or if you would prefer to take Insolvency Proceedings. These provide an alternative course of action which is rather more complex and expensive than any of the methods discussed above, and should really only be considered where large sums of money are owed. Insolvency advice and proceedings are available as a separate service upon request.
Remember that once a debt has been passed to us to recover, it is vital that you inform us of any contact the debtor makes with you direct, particularly if any money is paid to you.