Solicitors do not recover debts on behalf of a client. A debt recovery solicitor’s role is to facilitate legal action and provide advice. If you are owed money and approach a debt recovery solicitor to recover that money, you will be able to take action in a 2 stepped process:

1. Letter before action – debts do not have to be settled in a court room. In many cases a letter before action can be sent to explain to the debtor that you’re very serious about recovering the money owed and if adequate response is not received by a certain dead line, court action will be taken.
2. Court action – If the debtor is unresponsive to the letter then court action can be taken. The cost in court fees ranges from £15 to £70 and if court action is necessary, the debt recovery solicitor will provide you with a court action form that can be sent to the debtor.

Debt recovery Agents

1st Party Debt Recovery Agents

A 1st party debt recovery agency exists within the business who is owed the debt. In cases like this, disputes are settled directly and there is no need to hire an agency or solicitor.

3rd Party Debt Recovery Agents

3rd party debt recovery agents are the most common type of debt recovery agencies as most businesses are unable to afford an in-house legal team. 3rd party debt recovery agents often charge only if the debt is successfully collected and this fee can range from 25%-40% of the total debt collected. This debt recovery fee is known as a ‘pot fee’ (potential fee upon successful collection).

Taking a percentage fee can prove extremely costly especially when combined with the time and money spent leading up to aggressive debt recovery. Other debt recovery agents offer a ‘soft service’ at a flat rate. This soft service involves a series of urgent letters that demand the debtor to pay back the debt. By paying a flat fee the costs are more transparent. This type of debt recovery can also prove to be very successful and more rewarding than paying the often more expensive ‘pot fee’.