Debt Collection Fees UK
Every debt collection agency has a different process for collecting unpaid debts whether that is for business debt collection or personal debt collection. These individual processes follow a standard format to abide by the relevant debt collection laws in the UK.
Once a debtor has fallen into arrears you want to find a debt collector that will trace and collect at the speed you require. They will take the appropriate tone with your debtor.
The 4 Steps Of Debt Recovery
Letter Before Action (LBA)
This is a formalised letter sent to a debtor instructing them to settle any outstanding debt within a set time period (typically 7-14 days). These can be issued yourself but are more likely to lead to payment when issued by a 3rd party debt recovery agency. 86% of cases result in payment at this stage.
An LBA must be issued prior to taking a debtor to court.
2. Legal Claim & Court Proceedings
If a debt remains unpaid following a Letter Before Action or Statutory Demand the next step in the UK debt collection process is legal proceedings.
Initially, a claim will be made to the courts, your debt collector will be able to action this for you to ensure you follow the debt collection laws. Whether you are looking for small debt recovery or large commercial debt collection you must issue a claim to the court first.
The Court will then serve the debtor with your claim alongside instructions to:
Settle the outstanding debt.
Accept the debt fault and request a payment plan.
Negotiate to settle the debt.
Issue a defence.
The court form issued to your debtor is very clear and will state they must pay the debt and interest costs within 14 days. This process is usually handled by specialist debt collection solicitors.
3. County Court Judgment (CCJ)
This form of Court Order is issued by a County Court once they prove your debtor has defaulted on their payment. This is the payment agreement agreed upon in the previous steps of the UK debt collection process.
You don’t need to wait for a County Court Judgement (CCJ) to be granted. This can be issued the day after the expiry of your County Court Claim. Once a CCJ has been issued the enforced collection of the debt can begin!
4. Enforcement
Now that a County Court Judgement has been granted you can begin to enforce the debt collection with the full support of the UK’s debt collection laws behind you.
Whichever debt recovery team you appoint will begin work immediately. Their team of paralegals and solicitors will now advise on the most efficient next steps to enforce the debt and recover your money.
