DEBT RECOVERY- Our Cost and Services
Please note all VAT stated is charged at 20%
N K Law Solicitors can help you with recovering these debts which may have arisen as result of your contract being breached.
N K Law Solicitors Ltd can provide a fixed-fee debt recovery service or on an hourly basis depending on the amount and it being claimed.
Recovery is based on a staged process for an undisputed debt.
We three stages of escalation and have a single fixed fee associated with each escalation stage of the undisputed claim.
Stage 1– Letter Of Claim/Letter Before Action
Stage 2– Issue Of Proceedings
Stage 3– Enforcement
Note: If the debtor disputes that they owe the amount you are claiming, or the amount, then our fixed fee will not apply and we will have to apply our hourly rate which will be discussed in advance with you before commending work. We can still however offer you the advice you need to recover your debt.
What Do Our Fees Include At Each Stage?
Stage 1- Expected Process and Timescales and Costs:
Stage 1: – Letter Of Claim/Letter Before Action stage
Stage 1 Process:
Business to Business Debts (Company Debt Recovery)
Stage 1- Letter before Action
Stage 1 Timescales: We shall send the letter before action within 5 days of receipt of your full instructions and the debtor is given 14 days to respond from the date of receipt of the letter.
Business to individual Debts (Individual Debt Recovery)
Stage 1- Letter of Claim
Initial information to be provided by the creditor
The creditor is required to send a Letter of Claim to the debtor, which should contain the information and documentation set out in the Pre-Action Protocol for Debt Recovery.
Stage 1 Timescales: If the debtor does not reply to the Letter of Claim within 30 days of the date on the letter, the creditor may start court proceedings.
Response by the debtor
The debtor should use the standard Reply Form (annex 1 to the protocol) to respond. The debtor can request copies of any documents from the creditor and enclose documents they think are relevant. The creditor should not start court proceedings less than 30 days from receipt of the completed Reply Form, or 30 days from the creditor providing any documents requested by the debtor, whichever is later.
If the debtor indicates that they are seeking legal advice, the creditor must allow the debtor a reasonable period of time to do so.
Disclosure of documents
The parties should exchange and disclose documents as early as possible, to help them understand each other’s position. The creditor must provide documents or information (or otherwise explain why the documents or information requested are not available) within 30 days of any request.
Taking steps to resolve the matter and alternative dispute resolution (ADR)
If the parties cannot come to an agreement about the repayment of the debt, they should consider using an appropriate form of ADR. If the parties reach an agreement for repayment of the debt, which the debtor subsequently breaches, the creditor must send an updated letter of claim and comply with the Protocol afresh before issuing court proceedings.
Final Letter before Action
If the debtor responds to the letter of claim but an agreement is not reached, the creditor should give the debtor at least 14 days’ notice of their intention to start court proceedings.
Our Stage 1 Service Fee Includes:
- Taking instructions from you
- Obtain any further information that is required.
- Advising you of the options moving forward
- Drafting and sending of the ‘Letter Before Action’ or ‘Letter Of Claim’
- A Letter before Action is sent – the debtor is given 14 days to respond.
- We will write to you to inform when this is sent to the debtor.
- If payment is received, we will bank the money into our client account and once the payment has cleared in our client account, we will send the payment to you by bank transfer.
- If we receive any correspondence from the debtor we shall inform you of the correspondence.
Stage 1 Fees and Costs:
For an undisputed claim, we charge a fixed fee according to the amount being claimed:
Up to £1,000 we charge £80 + VAT
£1,001-£10,000 we charge £150 +VAT
£10,000 plus we charge £180 + VAT
A fixed correspondence charge of £25 (inclusive of VAT) is also incurred where either:
- We receive correspondence in writing by telephone or in writing from the debtor or third party. We will deal with that correspondence and report to you with recommendations as to the next steps.
- You contact us to discuss a matter at the Pre-Action stage and we take your instructions and/ or provide guidance
- You instruct us to correspond by telephone or in writing with a debtor or third party and we carry out your instructions
Where the Claim is disputed we may be able to arrange a fixed fee depending on the amount of the debt and facts of the case, however failing which we shall charge our hourly rates:
The charging structure of this firm is as follows:
Our hourly fixed rates as follows:
|Grade of Fee Earner||Description of Fee Earner||Hourly Rate|
|A||Notaries Public, Consultants, Partners/Directors and Solicitors with over eight years post qualification experience including at least eight years of litigation experience||£225.00 per hour|
|B||Senior Solicitors and Fellows of Institute of Legal Executives and Chartered Accountants with over four years post qualification experience including at least four years of litigation experience||£196.00 per hour|
|C||Assistant/Associate Solicitors and Senior Legal Executives, Law Costs Draftsmen, Legal Executives and Para-Legal||£170.00 per hour|
|D||Trainee solicitors and other support staff||£136.00 per hour|
Letters out and telephone calls will be charged at a tenth of this hourly charging rate. (Hourly Charges are plus VAT)
What Do Our fixed Fees Not Include?:
- Disbursements-these are listed separately below and these can include asset tracing. There are separate fees for this.
Disbursements: In addition, there will be disbursement fees payable which will depend on the type of debtor. We handle the payment of the disbursement on your behalf to ensure a smoother process These could include payments made to a third party such as Bailiff or Court fees etc:
- ID Verification: £10 plus VAT
- Claim issue fee: Depends on the amount claimed and usually at stage 2 of the escalation
- Bankruptcy search: £2 per person
- Office Copy Search £3 per title
- Asset Tracing Search(Optional) Prices range from £125-£300 plus VAT depending on level of search.
- Person Tracing Search (Optional) £25-£45 plus VAT Dependant on depth of search required.
- are costs related to your matter that are payable to third parties such as court fees or a barrister’s fee.
Stage 2- Court Proceedings
If no recovery at Stage 1 and debt is not disputed, we shall commence legal proceedings and move to stage 2.
Our Stage 2 Service Fee Includes:
- Once we have received your instruction to move to the next stage we will check the information you have provided and ensure we have sufficient information to draft the court documentation.
- If the debtor is a limited company, we will check the status and address of the debtor against any companies house information.
- We will contact you for clarification and your instructions.
- We will draft your claim to be sent to the relevant County Court.
- We aim to do this within a reasonable time (usually a few days of receiving written confirmation to issue proceedings and move to the next stage)
- We will send the document to the Court for an allocation of issue number and provide this to you also.
- We shall send the Court documents to the court by first class post.
- Should the debt be received, we shall inform you of this and account for the monies received into our client account.
- Once any payment has cleared in our client account, we shall send the payment to you by BACS or bank transfer.
- If we receive part payment, we shall continue requesting the remainder from the debtor.
- If we receive from the debtor/defendant or via the court a defence or acknowledgement of service we will write to you with a copy of this document and let you know what you can do next.
- Please be reminded our fixed fee shall only apply to uncontested matters. An hourly rate will apply for contested matters. Our fees section details these more clearly but our hourly rate range from (£136-£225/hour plus VAT) We will clearly notify you in writing before any hourly rate is to be incurred.
Stage 2 Fees and Costs:
- If no satisfactory response is received to the Letter before Action, we can issue court proceedings with your permission.
- The debtor has 14 days to file a Defence. (If the debtor files an acknowledgement, this can be increased up to 28 days).
- If no Defence is filed, judgement is requested by us. There is separate charge for this. ‘Please see our fees section’
Cost on Account: When issuing court proceedings we will ask you to pay to us the Court fee and some payment towards drafting of the court documents. This will be calculated and you shall be informed in advance to allow you time also.
Stage 2 Timescales for judgement in default: It usually takes the court about 10 working days to enter judgement following receipt of a request to enter judgement.
For A Disputed Amount Claim Timescale: Should proceedings be issued and the amount be disputed, our hourly rate for costs shall apply and the matter could take 3-9 months to go to a final hearing depending on the court. We shall of course discuss these fees in more detail should it be disputed.
|Debt owed||Our fee||Court fee||Total (Plus VAT on Costs)||Recoverable from debtor (Court fee + fixed costs)|
|Up to £1,000||£150 + VAT||£25 – £60||£175-£210)||£75 – £130|
|£1,001-£10,000||£250 + VAT||£70 – £410||£320-£660||£150 – £510|
|£10,001 – £100,000||£500 + VAT||4.5% of claim value||£500 + 4.5% of claim||Court fee + £100|
The Total column is the amount you pay regardless of whether the debt has been paid at this stage. The Court calculate the fee on the total of the debt plus interest, which may put the Court fees and costs into the higher band.
There are very exceptional circumstances where we are able to cancel the court action on the day of processing. Where we are able to do so, a cancellation charge of no more than the equivalent 50% of our fee will apply, otherwise the total costs and fees will be payable.
What Other costs Can I Incur at stage 2?
In addition, there will be disbursement fees payable which will depend on the type of debtor.
These could include payments made to a third party such as Bailiff or Court fees etc:
- Claim issue fee: Depends on the amount claimed and usually at stage 2 of the escalation
- Asset Tracing Search(Optional) Prices range from £150-£300 depending on level of search. If not carried out already
- Person Tracing Search (Option) £25-£45 Dependant on depth of search required. If not carried out already
Cost on Account
When issuing court actions we will ask you to pay for this and it will equate to the court fee and our fee for drafting papers at stage 2.
Stage 3- Enforcement of the Judgement
Our Stage 3 Service Fee Includes:
-Checking and making sure the case is ready to execution for recovery and discuss the relevant type with you.
-we will instruct the relevant court bailiff
-liaise with the Court
-Prepare relevant court documents
-Reviewing and advising you of the position and any outcome
-We will discuss this further at this stage before action is taken.
-Once we have obtained judgement in your favour we will proceed to recover this via one of the enforcement action methods.
-This will be discussed with you sent the instructions to the Court for enforcement accordingly.
-we will deal with any funds which we receive on your behalf
-Once Judgement in Default obtained, enforcement action can be taken in a range of different ways:
For example: Order that the debtor attends court for questioning Writ of Control – High Court Bailiff (where debt exceeds £600)
- Attachment of Earnings order
- Third Party Debt Order
- Charging Order on Debtors Property
Stage 3 Timescales vary according to the type of action:
See table below to see type, cost, disbursements and average timescale for each type of enforcement.
|Type of Enforcement action||Enforcement action
|Court fee and Disbursements||Time scale|
|Application for order that the debtor attends court for questioning||£250 + VAT||Court fee of £55 + process server’s fee (£60 – £150 approx.)
Legal representation fee at the hearing will depend on location of the hearing.
|8-12 weeks from date of application (however this may vary depending on Court)|
|Application for Writ of Control – High Court Bailiff (where debt exceeds £600)||£95 + VAT||If unsuccessful: £66 Court fee + bailiff’s fee of £75 + VAT. If successful: £66 Court fee (Court & bailiff’s fee recoverable from debtor).||8-12 weeks from date of application (however this may vary depending on Court)|
|Application for an Attachment of Earnings order||£150 + VAT||Court fee of £110||6-10 weeks from date of application (however this may vary depending on Court)|
|Application for Third Party Debt Order||£250 + VAT||Court fee of £110 Representation at court – estimated at up to £300||8-12 weeks from date of application (however this may vary depending on Court)|
|Application for Charging Order on Debtors Property||Charged on an hourly rate basis (an estimate will be provided based on the circumstances of the debt owed)||Court fee of £110 Land Registry fee of £40 Representation at court – estimated at £300||1) Interim Charging order 3-4 weeks from date of application.
2) Final Charging Order 6-10 weeks from date of application (however this may vary depending on Court)
The above is a brief overview of the process and costs involved and we are more than happy to discuss with you any of the stages in more detail.
You will be kept fully informed of how your matter is progressing and instructions will always be sought before any step is taken.
VAT and Court Fees:
Please note all VAT stated is charged at 20%
Our Charges exclude VAT and disbursements such as Counsel’s fees, High Court Enforcement Officer’s abortive charges, Agent’s fees, etc. These vary in each case.
Sometimes, we are instructed to start proceedings and are then asked to try and stop them, because e.g. the debtor has paid the debt. In such a case, if we are able to recover it from the court, we will credit you with the court fee but will charge the fixed costs.
Who Will Do The Work:
Our debt recovery work is carried out by a qualified Solicitor Mr Moh. Raza Javid (who is Fee Grade A rate) and with over 8 years of post qualification litigation experience. He is assisted by paralegal Mr Ihsan Niazi (who is Grade D).
You are able to view the staff individual profiles in the ‘About Us’ Page.