Now that court fees have increased...
From the 9th March 2015 the Ministry of Justice increased the amount required, to be paid to Court, just to commence proceedings. In some cases the issue fee can be as much as £10,000!
These increases do apply to business debt recovery claims and a summary of the costs are as follows:
• Court fees for claims of up to £10,000 will remain the same (£35 to £455).
• Courts fees for claims above £10,000 to £200,000 will increase to 5% of the claimed amount (not including interest claims).
• Court fees for claims of £200,000 or above will be capped at £10,000.
Many believe that increasing these costs is a detrimental move, with strong opposition from The Bar Council, the Law Society and many other legal professionals. The potential prohibitive effect on businesses and their debt recovery is encouraging Claimants to look at alternatives.
Is it therefore time to consider an alternative approach when chasing your business debt?
Where a debt is over £750.00 for instance and is not in dispute, (i.e. where the debtor is simply unable to pay, prioritising other creditors or simply ignoring the debt) the effect of Winding Up proceedings or Bankruptcy proceedings in some cases can be quicker and cheaper in terms of recovery than issuing a County Court Claim Form.
The procedure is not suitable for all debts but where Creditors are looking for a strong solution and with an eye on cash flow, Winding Up proceeding and Bankruptcy proceedings can be very effective.
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