We are delighted to announce the introduction of our new debt recovery services at Notary Express, regulated by the Solicitors Regulation Authority.
In keeping with our desire to promote a fast and responsive legal culture, we have extended our remit to provide our individual and corporate clients with a prompt and effective service in debt recovery.
Below is a brief overview of standard debt recovery procedures and enforcement options available.
Letter Before Action
At the outset of any action, a creditor is expected to send a formal letter before action, generally after less formal reminders from the creditor have not been successfully. This letter sets out the sums outstanding, including any interest that has accrued (and continues to accrue) and will request payment of the full outstanding amount within 14 days, failing which formal court proceedings will be issued.
County Court Proceedings
In the absence of a response to the letter before action (or receipt of a negative response denying liability), a County Court claim will be initiated. This requires preparation and filing of a claim form and particulars of claim at the court, together with a court fee. This fee is based on the amount of the claim and calculated on a case by case basis.
Once issued, your debtor will have 14 days from the date of service to respond in one of the following three ways:
- By filing an acknowledgement of service noting an intention to admit or defend the claim. This extends the deadline for substantive response by a further 14 days from date of service (a total of 28 days);
- By filing an admission admitting the debt and offering to make full payment on a certain date or by regular instalments; or
- By filing a defence.
If the debtor fails to respond or files an admission, you can then request a County Court judgment against the debtor for the outstanding balance, interest and fixed costs.
A judgment will be registered on the Central Register of Judgments, Orders and Fines for six years if not paid within 30 days and is likely to negatively affect the debtor’s credit rating. It is in the debtor’s interest to not simply ignore the claim.
If the debtor files a defence, each party will be asked to file a directions questionnaire with the court. This enables the court to set down a timetable as to what procedural steps are required, and when by, to bring the matter to a conclusion. A key part of this is allocating the case to a “track”.
- The “Small Claims Track” is for all money claims up to £10,000.
- The “Fast Track” is for all money claims between £10,000 and £25,000.
- The 2Multi Track” is for all money claims exceeding £25,000.
The track that your case is referred to determines the amount and complexity of the steps required to reach a conclusion in the matter.
Should your case progress to this stage, full information regarding the appropriate steps to take in the matter will be provided.
The steps above are only half of the equation however. It establishes a legal right to the amount expressed in the judgment, but it does not give you direct, immediate access to the debtor’s chequebook. There are several options available to “enforce” the judgment debt however.
High Court Enforcement Officers/County Court Bailiffs
Any judgment over £600 can be enforced by High Court Enforcement Officers. If the judgment is for a sum under £600, it will be enforced by the County Court’s own bailiff service.
The rules provide the bailiff or High Court Enforcement Officer with the power and authority to seize as many assets of the debtor as required to satisfy the totality of the judgment debt, plus the Enforcement Officer’s own fees for acting on your behalf. If there are any surplus proceeds from the sale of the assets (generally sold at auction) once the creditor has been paid, these will be returned to the debtor.
We have a connection with the UK’s largest judicial services group, which has recovered more money for their High Court clients than anyone else. It is paramount to us that we provide you with the very best service that we can.
If the debtor owns their own property or land, an order from the court placing a ‘charge’ on the property will essentially provide you with a mortgage over that land as defined in the order. When the property or land is sold, the sum, plus accruing interest, will be paid to you from the proceeds providing there is sufficient equity.
An application is made to court to request and interim charging order over the property before determining whether to make a final charging order at a subsequent court hearing. If they do so, the charging order is then registered with the Land Registry and marked accordingly on the title documents to the property.
Third Party Debt Order
Where your debtor is receiving payments of a debt owed to them, the court can make an order that essentially removes the middleman so that you receive those payments owed to your debtor directly.
An information hearing can be requested to establish whether the debtor has any debts owed to them.
Attachment of Earnings
An attachment of earnings order orders an employer to deduct a set amount (generally monthly) from your debtors’ earnings and pay them into court for your benefit.
The order will specify the protected earning rate (i.e. the amount that the debtor must be allowed to retain out of his earnings) and the normal deduction rate that you will receive.