Debt Collection

All businesses need cashflow.

Unpaid bills reduce cashflow.

Businesses without good cashflow will usually fail.

We can help, and where necessary have Court papers issued and with the debtor, sometimes within 48 hours.

The amount we charge for issuing a Court claim based on an unpaid invoice is the same as the amount you can recover from the debtor.

Claims for under £5000

The normal rule is that you can recover only fixed solicitors costs from the debtor for drafting the Court claim. If the claim is based on an invoice you have issued, we will charge only that amount so you can recover the full amount you are owed if the claim is undefended. In addition we have an account with the Court Service which enables us to issue the claim online with reduced Court fees. We need cleared funds for the fixed solicitors costs of issue and the Court fee and we can normally have the papers sent to the Court the same day and the Court will normally issue the claim and send it to the debtor that day or the following working day. If the Claim is defended then it will be referred to the Small Claim Court where further solicitors costs are not recoverable. We shall be able to advise on the best way forward if your claim is defended. Our free guide to the small claims court is available by email.

Claims for over £5000

Here the normal rule is that the loser reimburses the winner almost all their costs of dealing with any defence but that principle can be overturned, or the amount of costs recoverable can be reduced, if the winner did not follow the “pre action protocol”. The protocol is designed to stop claims going to Court where they could be resolved by detailed correspondence. The details in the protocol are quite specific. Some clients take the view that the debtor is simply stalling and has no defence in which case they tend to take the risk of not following the protocol on the basis that, if there is no defence, there will be no costs which can be reduced or disallowed. The added danger is that if a defence is entered the Court can put the Court case on hold whilst the protocol is followed.

We can act for you in properly complying with the detail of the protocol. It does have a surprisingly high success rate and so is often cheaper and quicker than a defended Court action. 

If the debtor will not pay, then you can issue the Court claim and we will normally issue the claim as soon as we have cleared funds to pay the Court fee and the recoverable solicitors costs of issuing the claim. If a Defence has not been entered within a month we will automatically enter Judgment for the whole amount of the Claim with the costs you have incurred. If a Defence is entered, we will advise on the issues raised in the Defence and the costs and risks of dealing with that Defence.

Enforcing a County Court Judgment

The most effective way of enforcing a Judgment for over £600 tends to be to send in the sheriff. If the sheriff fails then you can start winding up/bankruptcy proceedings. The threat of winding up / bankruptcy proceedings is often a powerful incentive for the debtor to pay if they have the money or can raise it. If the Judgment is for under £600 you can send in the Court Bailiff but they have a relatively low success rate.

If the debtor owns land you can get a charge on that land so that when it is sold you can get your money from any of the proceeds which would otherwise go to the debtor. You can try and force the sale but that is expensive and since the Court has discretion, needs detailed consideration.

If the debtor is employed you can have some of their wages deducted and paid to you.

If anyone owes the debtor money you can get an order that they pay you some or all the amount due under the Judgment. This includes any of the debtor’s banks or savings accounts in credit.

If you want, you can have the debtor attend Court to explain their financial circumstances. This is relatively cheap but often takes a long period of time. If the explanation is given, the Court will send you a report so you can decide the best way of enforcing.

Statutory Demands

Claim for over £750 which have no arguable defence can be dealt with by a statutory demand. Our charges for drafting the demand will be £250 + VAT. The demand has to be “served” on the debtor which in the case of a registered company just involves sending the papers by recorded delivery to their registered office at an additional costs of some £20 + VAT. In the case of an individual debtor the papers need to be handed to them in person. The costs of that are normal in the region of £120 + VAT per attempt. Failure to pay within the time allowed allows you to start winding up/bankruptcy proceedings and again it is this threat which is a powerful incentive for the debtor to pay if they have the money or can raise it. 

Why use John Hodge Solicitors?

We have many years experience in debt collection. Use the John Hodge Solicitors’ debt collection team and you will:

  • Save on wages for collectors, plus the associated employee benefits and NI contributions
  • Free up your accounts department to concentrate on the day to day accounting routines
  • Save on additional employment costs for credit control
  • Have the peace of mind of knowing that payments will be chased without having to lift a finger
  • Receive interest and compensation with payments from late payers
  • Receive payments you may already have mentally assigned to the bad debt account.

We know that your success depends on the results of our service. The fact that we have been successfully offering this service for so many years speaks for itself. Our clients continue to use us because they are better off through doing so. You could be better off too.

Don’t let bad debts affect your business future.
Let your personnel do what they do best, concentrating on your day to day operations while we chase the debts.
Contact us TODAY to get your debts collected.