Debt Recovery and Litigation
As a business, you can only operate if you are paid for your goods or services. Bad debts are not only inconvenient but put a healthy cashflow at risk. Spending time to recover a debt can be a further strain on your resources. We can help you to recover debt through court action, making the process simple and cost effective.
We also work with Creditreform UK to offer a full debt recovery service. If you have not exhausted other pre-court avenues, we may refer you to Creditreform UK, who will explore alternative options to recover your debt out of court on a no win no fee basis.
Why outsource debt recovery?
Using a solicitor shows that you are serious about legal action
Take the burden away from your accounts team
Our experience makes us efficient and cost-effective
Discourage future late payments
What is the process of recovering a debt?
The process of recovering a debt will depend upon the debtor's response - whether they defend the debt, or at what point they make payment. This is not a process that you follow to the end in every case, it is a series of steps you may take to recover your money.
Both parties should be open to settlement to save on costs throughout the case, although this will not always be possible.
Our fees are split into stages so that you only pay for the services used. Before progressing to each stage we will discuss costs and your chances of successfully recovering all or part of the debt with you. This will allow you to make an informed decision about how far to pursue your debt. Visit our fees page to find out more.
How long does it take to recover a debt?
The length of time it takes to recover a debt will vary depending upon the complexity of the case and the debtor's response.
Many debtors pay quickly upon receipt of the Letter Before Action, making the process quick and simple. If your debtor is a business, the Letter Before Action will give them 14 days to pay the debt, whereas individuals and sole traders must be given 30 days.
Where proceedings are defended we would expect it to take between six months and one year to recover a debt. If the case is defended, it can take up to a year to be listed and heard in Court. The time taken to enforce the order and receive the money owed will also vary depending on the debtor.
How much does it cost to recover a debt?
Our fixed fees are based on the amount of debt you are seeking to claim and divided into stages, so that you can decide how far you go in pursuing the debt.
We will do our best to give you an accurate estimate of the costs you may incur, both at the time that you first instruct Spencer Shaw and at appropriate intervals whilst we work for you.
Pre Litigation
We work with Creditreform UK to offer a full debt recovery service. Creditreform will use pre-court avenues to pursue debts on a ‘no win no fee’ basis. If we believe Creditreform may be able to recover your debt without legal action, we may refer you to them. Spencer Shaw Solicitors and Creditreform share access to our work, so that you will never pay for work to be repeated.
Letter Before Action (LBA)
A formal letter informing the debtor that, if they do not settle the debt within a given time, you will begin court proceedings. This letter must comply with Civil Procedure Rules or you may be penalised later in the process.
In many cases, a Letter Before Action is all that is needed to encourage payment. An LBA from a solicitor shows that you are serious about pursuing the debt and makes the debtor aware that further action will be taken if they don't make payment in the specified time.
Legal claim
If your debtor still does not pay the debt, you may file an Acknowledgement of Service. This gives the debtor 14 days to:
Admit the debt and offer payment in instalments.
The court will make an order giving you the power to enforce collection of the debt. It is your choice whether you are happy to accept payment in instalments, but if you are then the court will order the debt to be settled this way. The order is also recorded against the debtor's credit record.
You may choose to continue to trial or to settle out of court. We will assess the merits of your case throughout the process and advise you if we think there is a significant risk of the court finding against you. If you choose to settle the claim, we can help to negotiate this.
If the court finds in your favour then it will make a Court Order, which allows you to enforce the debt.
If the court finds against you, you will be ordered to pay the other party's costs, which could be greater than the value of the initial debt. We would advise you beforehand if we felt that your case was not strong enough to proceed to court, and advise you to settle if possible.
Enforcement
You may seek to enforce the debt as soon as you have received the County Court judgment.
Get in touch
Do you have a legal matter you'd like to discuss with us? Get in touch using the details below or use the form here and a member of our team will be in touch to discuss your enquiry.
Address: Spencer Shaw Solicitors Limited
Vancouver House, 111 Hagley Road, Edgbaston, Birmingham B16 8LB
Opening hours:
Monday - Friday 9:00AM - 5:00PM
Saturday, Sunday & Bank Holidays - Closed
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