Insolvency Pricing
If you are owed an undisputed debt of more than £750.00 by a company, or more than £5,000.00 by an individual or sole trader, you may wish to consider commencing insolvency proceedings against the debtor.
Whilst bankruptcy and winding-up proceedings are not a debt collection process, they can be instigated if you are owed an undisputed debt, and it appears that the debtor is unable to pay its debts as they fall due (and thus cash flow insolvent), or its liabilities exceed its assets (balance sheet insolvent). In such circumstances, a winding-up petition can be presented against a company or a bankruptcy petition presented against an individual/sole trader.
If the petition is successful, the Official Receiver will investigate and take charge of the debtor’s assets and may appoint an insolvency practitioner to realise the assets for the benefit of all the debtor’s creditors.
If you wish to pursue insolvency proceedings against a debtor, we will agree an initial fee with you for reviewing any documents and correspondence supplied by you and for preparing the relevant petition and other procedural steps required to be taken within each process. Our fees are usually in the region of £2,500 – £4,000 plus VAT and disbursements (see further below) and will depend on the complexity of your matter.
It may be necessary to serve the debtor with a statutory demand prior to commencing insolvency proceedings. A statutory demand is a formal demand for payment of a debt. If the debtor fails to make payment of an undisputed debt within 21 days of being served with the demand, the creditor can then proceed to issue bankruptcy/winding-up proceedings.
The following third-party payments, known as disbursements, will be payable in addition to our legal costs in the event insolvency proceedings are pursued:
Winding – up (insolvency against a company)
- Court fee – £280.00
- Official Receiver’s deposit – £1,600.00
- Process server’s fee for serving the petition – £120.00 per attempt to serve
- Advertisement fee in the London Gazette – approximately £100.00
- Counsel’s fee for attending first hearing – £150.00 – £750.00 plus VAT depending on the court and complexity of the matter.
Bankruptcy proceedings against an individual/sole trader
- Court fee – £280.00
- Official Receiver’s deposit – £990.00
- Process server’s fee for serving the petition – £120.00 per attempt to serve
- Counsel’s fee for attending first hearing – £150.00 – £750.00 plus VAT
Conclusion
The fees above are set out on the basis that the enforcement action is not opposed by the debtor and, where a hearing is required, that only one hearing is necessary. In the event that a hearing is adjourned, or a further Hearing is ordered then additional legal costs may be payable. If this is necessary, then we will notify you of this in writing.
When the enforcement action sought requires a court hearing, we will need to arrange for an advocacy agent or a barrister to attend the hearing on your behalf. If this is necessary, then we will notify you of the fee for the agent or barrister ahead of the hearing.
In respect of a short hearing, such as a hearing of a bankruptcy petition, an agent’s fee for attending at the hearing is likely to be in the region of £150.00 – £300.00 plus VAT depending on the complexity of the matter. If you would prefer a barrister to advocate on your behalf, then this will be slightly more expensive. Again, we would seek to identify the likely fee ahead of the hearing with you.
Other fees that might be incurred in connection with the enforcement of your County Court Judgement may include process server’s fees (for example to serve a statutory demand or a bankruptcy or winding up petition where such fees are likely to be in the region of £100.00 – £125.00 plus VAT), debtor tracing fees (approximately £50.00 plus VAT), Land Registry fees to obtain office copy entries for the debtor’s property (£3.00 + VAT per property and/or plan) or to register an interim Charging Order (£40.00)).
At the point that you have obtained the County Court Judgement and we are determining the options available to you for enforcement, we will seek to set out the likely fees and disbursements that will be encountered for the relevant enforcement action considered.
No win, no fee?
As set out above, if you would rather instruct us on a ‘No win, no fee’ basis then we may be able to offer assistance in this manner. If this is agreed, then it would mean that we would only receive payment if we recover the debt. You would therefore have no legal costs to pay if we were unsuccessful and we would only be paid based on our success in recovery.
The basis of the charges for this type of an agreement would be a percentage of the total sum recovered on your behalf. These percentage figures are set out above in Stage 1. Should it become necessary we can consider varying these figures if appropriate to do so.
If you would wish to consider this, then please speak to us and we will explain this further for you to make a decision.
If you wish to instruct us to assist you in the recovery of any debts owed, please contact us.
