Top-Rated Debt Collection Agency in United Kingdom
Fast and reliable debt collection in United Kingdom - no upfront costs, only pay for success. Request a FREE Consultation or upload your claim today.
Recovering your debt in the United Kingdom has never been easier.
Debitura focuses on debt recovery in the United Kingdom and has a team of skilled professionals who provide a wide range of services, such as managing accounts receivables, sending debt collection notices, conducting pre-legal and legal debt collection, and carrying out enforcement court proceedings. Our knowledge and proficiency in debt collection laws and regulations in the United Kingdom enable us to deliver prompt and practical solutions that help businesses retrieve outstanding debts.
Receive unwavering assistance throughout the entire process.
Tailored debt recovery approach.
We have more than 500 specialists who are expert in handling international debt collection.
We have the lowest cost with a success rate of 87%.
Premium Collections have been collecting debts in the UK and Worldwide for 39 years.
Multi-disciplinary law firm of solicitors and barristers specialising in litigation, immigration and court representation. Based in📍City of London 🇬🇧
The ultimate guide about debt collection in United Kingdom
Are you in need of assistance with recovering a financial debt from an organization or individual located within the United Kingdom? Look no further! Our team has helped hundreds of businesses successfully reclaim what is rightfully theirs. Let us help you too.
Recovering a debt in the United Kingdom can look like an improbable mission. Language and cultural differences, foreign regulations and practices, as well as extended distances create considerable obstacles.
Restitution is more easily obtained when you enlist the help of a collection agency well-versed in the laws and cultural norms of where your debtor resides.
Debitura is people-centric, investing time and resources to ensure your money gets back into your hands while maintaining a positive relationship with customers. Our public relations strategies are always justly balanced yet firm - we prioritize protecting your reputation above all else!
Diving into the British debt collection process can be overwhelming, but if you're looking to collect your debt without assistance from a law firm, then this guide is specifically for you. Here we provide an extensive overview of the entire process - from A to Z. On the other hand, if you prefer working with a local law firm that specializes in United Kingdom-based recovery efforts, our team is more than happy to help!
At Debitura, we make it easier to collect debt from the United Kingdom and over 200 other countries. Upload your claim now and within 24 hours you will receive 3 free quotes from regional debt collection attorneys in the UK. Start reclaiming what is owed to you today! By combining our people-focused methodology with revolutionary technology, we provide superior customer contact management while driving effective results. This comprehensive approach ensures that you receive the desired outcome without compromising your client relationships. Moreover, our network of debt collectors, attorneys, suppliers and vendors are invaluable connections that make it possible for us to get the job done. Regardless of size or scale, we consider all these relationships as treasures.
Get started on debt collection in the United Kingdom today at no cost. Simply create a free profile and upload your case in just two minutes.
Our pre-legal recovery process will be utilized for the initial 3 months to collect your claim. We guarantee a no-cure-no-pay approach.
If your debt remains unpaid during the pre-legal phase, we'll provide you three quotes from our local debt collection attorneys.
You get access to our online portal where you can track your case in real-time
Introduction to collecting debt in United Kingdom
Struggling to collect debt from your UK customers? Worry not! We make it effortless for you to get the money owed.
When dealing with delinquent payments in the UK, it is essential to know who owes what. The party responsible for paying back a debt is known as “the debtor” and the entity that issued the invoice or loaned out money is referred to as “the creditor”.
When the original creditor is responsible for collecting a debt, it's called “first-party collection”.
When a creditor entrusts the collection process to an outside source, this is known as "third-party collections".
- The average DSO has jumped to 59 days, likely due to the high cost of unpaid invoices.
- Although UK courts are adept at providing timely judgments, the recent fee increases for large-scale debts can be prohibitively costly. Expeditiously escalating debt collection to a professional external agency is still an effective solution to this issue.
- The insolvency framework is designed to protect the interests of creditors and simultaneously promote attempts at rescuing viable businesses. However, it does not guarantee that all debts will be repaid in full as debt renegotiations often result in reductions or write-offs. Additionally, liquidation proceedings are rarely successful for unsecured creditors who may receive nothing from such a process.
Days Sales Outstanding (DSO)
The Days Sales Outstanding (DSO) for all listed companies in the UK presently averages at 59 days, despite not having changed much since 2016. It's speculated that it was due to a rise of significant unpaid invoices when dealing with international clients. Fortunately, DSO has remained consistent these past few years for most businesses.
Common payment types in United Kingdom
If you're looking for a way to pay, these are the most popular methods:
Bank transfers are one of the most reliable payment options for international transactions, because they're fast, secure and widely accepted. For export deals, transfers come with an Export Credit Insurance policy to guarantee protection against any unexpected customer insolvency. This makes bank transfer a go-to choice among businesses looking to make global payments without risking their money.
In the UK, check payments are fading out and should be avoided at all costs. There is no guarantee that a bad cheque will not occur and criminal prosecution does not follow in such cases. Credit card or debit card payments over the phone have taken precedence instead for this reason.
Main corporate structures
Determining legal responsibility for business obligations is based on various structures as outlined below:
- Sole Proprietorships are the most common business entity for small enterprises, which involves one person owning and contributing assets to their own name; they may be held liable for all debts. Partnerships often entail two or more partners who share joint liability of company obligations. To mitigate potential risk, Limited Liability Partnerships (LLPs) allow managing partners to assume sole responsibility while silent partners have limited liabilities related only to capital contributions.
- If you are thinking of setting up a Limited Liability Company (Ltd), it is important to remember that shareholders will be responsible for the company's debts proportionate to their capital contribution. Additionally, there must be at least GBP 1 in the capital fund. Companies seeking more significant investments may instead opt to become Public Limited Companies (PLCs) or Joint Stock Companies with disputes of up to approximately EUR 58,000 required upfront.
The debt collection process in United Kingdom
The debt collection process in the United Kingdom usually happens in multiple steps. The picture below shows the standard steps for collecting debt in the United Kingdom:
1 Upload your claim:
If you want someone to help you with your debt, find a debt collection partner. You can give them your claim. If you use Debitura, we will give you 3 quotes from partners in Europe. This is free - no strings attached.
2 Amicable collection:
The collection process typically begins with a "campaign" of friendly reminders sent to your debtor via email, SMS, letter and all other available communication channels in the specific country. The goal is to get the debtor to pay or acknowledge the debt and start a payment plan. If we are successful in recovering your debt, you only pay a small success fee. Therefore, Debitura's amicable collections are 100% risk-free!
If you have not received payment from the debtor after the amicable phase, it is time to evaluate the next steps. We will look at the size of your claim, the payment probability and other factors before deciding what to do next. There are three typical next steps:
If you are owed less than 2.000-5000€, it is often not worth it to take legal action. In this case, we recommend "debt surveillance," where we will keep trying to contact the person who owes you money and try to reach an agreement.
B: Legal collections:
For claims that are large, it is best to start a legal process. The process depends on the country and how much money is owed. For example, in most EU countries, there is a simplified legal procedure for debts that are below 5.000€. We work with local debt collection attorneys in all European countries who can help you with your specific case and tell you how much it will cost.
C: Debt enforcement:
If the person you are suing has said that they owe you money, or if the court has said they owe you money, you can ask the bailiff to help you get your money.
At Debitura, we can help you with all three steps in United Kingdom.
Amicable collection in United Kingdom
At Debitura, we are committed to ensuring an absolutely safe and efficient Amicable collection process. Whenever you submit a claim, our experienced team starts working on it within 24 hours for maximum effectiveness!
To ensure your debtor is reached, we will use a wide range of methods including e-mail, text messaging, postal letters and traditional phone calls. We also have the capability to contact them through social media networks in United Kingdom if necessary.
This method intends to achieve two objectives:
A) prompting the debtor to pay off their full debt, or
B) securing an acknowledgement of the debt from the debtor and initiating a payment plan.
When a debtor has contested your claim, there's no need to start with an amicable solution--you must jump right into legal collections.
Late Payment Interest
Directive 2011/7/EU requires that payments in the EU should occur within 60 days and was adopted as domestic law through the 2013 Late Payment of Commercial Debts Regulations, which modify the 1998's Late Payment of Commercial Debts (Interest) Act. In accordance with the directive, the transposing law permits more than other EU Member States: invoices must be paid no later than 30 days after delivery of goods or services has been completed, knowledge of amount owed and any acceptance processes are fulfilled - all unless otherwise mutually agreed upon and not unreasonably disadvantageous to creditors. Consequently, a 'substantial remedy' may be sought in the form of interest on late payments supported either by contract or based upon an 8% increase above Bank of England's base rate.
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Legal collection in United Kingdom
If your claim has not been paid in the amicable stage or if there is a dispute, we are here to help you. We'll offer three free quotes from our local debt collection attorneys and they will contact your debtor to attempt negotiation of payment. Our partners can also take legal action which includes filing for a court order via the judicial system in United Kingdom; this enables them to enforce claims through enforcement courts with ease.
Legal action will usually happen when we try to get money from someone and they don't give it to us. Before we start a legal case, we have to send the person a letter. The letter says what we want and why we think they owe us money. We also send any documents that help prove our case. We give the person time to write back to us before we start the legal case. The person may also write their own letter saying why they don't think they owe us money. The person being sued should say if they agree with the lawsuit. If they don't agree, they should say why. They should also give proof to support their answer. Both sides should try to be reasonable in solving the problem before going to court. If either side is not reasonable, the court can punish them. You may be able to get a summary judgment if the debt is certain and undisputed. For example, if the debt is more than GBP 750=EUR 872, you can follow the statutory demand procedure (which costs around GBP 1,500=EUR 1,744). This allows you to request payment within 21 days. If the debtor does not respond, you can file a winding up petition.
If you can't avoid going to court, the court will give the person you are suing a notice that says you are suing them. They have 14 days to say they got the notice. If they do, they have another 14 days to say why they should not have to pay. If they don't say anything, you can ask the court for an order that says they owe you money. If the person being sued files a defence, and the person suing them thinks it's not going to work, they can ask the court to get rid of it. The court will have a hearing, and the person suing will need to show that the defence won't work and that there is no other reason why the case should go to trial. If the person who filed the claim wins, the court will enter a judgment against the defendant. The claimant can also ask for money to cover the costs of the application. But this does not happen often. If the application is not successful, then the claim will continue as a defended claim.
If someone does not agree with the claim, they will file a defence. The court will decide which track the case should go to depending on how much money is involved in the case. The Small Claims Track is for cases where the value of the claim is below GBP 10,000=EUR 11,632. The Fast-Track is for cases up to GBP 25,000=EUR 29,081 that are likely to last for less than one day and where expert evidence is limited to one expert per party and in only two fields. The Multi Track is for all other claims. The court will set a date for the final hearing if the claim is allocated to the small claims track. This hearing is informal, and the court will make a decision at this time. If the claim is allocated to the fast track or multi-track, however, the court will set directions for managing the claim towards trial rather than just listing a final hearing date. The directions for the court case will include when each person gets to show their evidence, when witnesses will talk, and when the trial will be. On the multi-track, the court may order the parties to attend a meeting before the trial to make sure that they have followed the directions and are ready for trial. At this stage, the Courts may also add a recoverable costs cap.
When making a claim, the person will say what they want, which might be a way to get money they are owed, damages to make up for what was lost, an order to stop something from happening or being done, a statement about something, someone doing what they agreed to do, or an order to sell property.
The UK is split into three legal systems. The laws of England and Wales, the laws of Scotland and the laws of Northern Ireland. Some law is provided through Statutes. But decisions from the Higher Courts are also binding and must be followed by Lower Courts. This information is about debts, contracts and claims which are governed by the laws of England and Wales.
The Commercial Court follows the Civil Procedure Rules (CPR). County Courts usually deal with small claims that are worth less than GBP 50,000=EUR 58,163. The Queen's Bench Division deals with most contract and tort claims. The Chancery Division deals with some contractual disputes, but it would rather deal with claims involving trusts, estates, land, mortgages, deeds, partnerships as well as corporate insolvency matters. In addition, specialized judges render judgments in the Commercial Court (High Court), the Bankruptcy and Companies Court, and the Patents Court (Chancery Division).
Legal fees depend on how complicated and big your claim is. To get the best price, ask different attorneys for their prices so you can compare them. You can do this easily by using Debitura.
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Debt enforcement in United Kingdom
If you have a written acknowledgement of your claim from the debtor, or a court order, you can use the bailiff's court in United Kingdom to get your claim enforced.
If someone does not pay money they owe you after a judgment, you can ask the court for help. One way the court can help is called a Warrant of Control. This option is good for smaller amounts of money.
If you don't pay the money you owe, someone from the county court will come to your house and ask for the money. If you don't have the money, they may take some of your things that are worth the same amount of money as what you owe. They can't come inside your house unless you invite them in. They have 12 months to collect the money, but they can ask for more time if they need it.
If you want to control something, you can go to the court and ask for a Writ of Control. If the thing you want to control is worth less than GBP 600=EUR 697, you won't have to pay any extra costs. If it's worth more than that, you can ask to have the proceedings transferred to the High Court so that you can get a Writ of Control. The Writ of Control is a paper that is sent to a High Court Enforcement Officer, also called a sheriff. The sheriff's job is to make sure that the writ is obeyed. The sheriff can charge extra money for doing this. The sheriff can also take away things that belong to the person who owes the money and sell them at an auction.
An order to obtain information may help us understand the debtor's means. This can be sought against an individual or an officer of a company/corporation. The debtor will have to go to court and answer questions about their finances. This way, the creditor can decide the best method of enforcement.
If the person you are trying to get money from owes someone else money, you may be able to get that money directly from them. For example, if they have the money in their bank account.
If someone owes you money and they own a house, you can ask the court for a charging order. This means that if they sell their house, you will get some of the money from the sale to pay off what they owe you. The court will take into account whether or not the house is a family home before making a decision.
The process and how much it will cost varies depending on your situation. You can upload your information to Debitura, and they will give you three quotes within 24 hours.
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Upload your claim and get 3 FREE quotes from our local collection partners.
Insolvency proceedings in United Kingdom
The final stage you can initiate if your debtor cannot pay his debts is an insolvency procedure. The goal of this procedure is to get rid of the debtor's assets and give them to the creditors following the debt priorities.
- Out-of-court proceedings are not specified by law.
- The Enterprise Act of 2002 introduced an emphasis on rescuing businesses, and several procedures may be considered in order to commence any type of insolvency proceedings.
- The UK Corporate Insolvency and Governance Act 2020 introduced the Moratorium: a company Directors can apply for 20 business days protection from certain creditor action, extendable for another 20 business days without consent or longer with consent of creditors or the court. Its purpose is to give companies time to pursue a rescue or restructuring plan.
- Company Voluntary Arrangement (CVA) proceedings first allow a debtor to retain legal control over the company, under the supervision of an Insolvency Practitioner, in order to reach a legally binding agreement freezing interest and charges and prohibiting creditors from demanding additional payments. Once accepted by creditors, the arrangement will be monitored and payments distributed by the Insolvency Practitioner until successful completion. Debtors often enter into CVAs to avoid bankruptcy.
The analysis is concluding that the risk of doing business in United Kingdom is low. Based on this low score, You can feel reasonably confident that you will be able to get paid when trading with customers in United Kingdom. Nonetheless, we always recommend doing a specific credit analysis on an individual customer basis before offering any credit. The low risk score is based on the following factors:
The economic risk in United Kingdom
Economic risk in United Kingdom is very low (1 out of 6). An economic risk of 1 out of 6 is low in Europe.
GDP and economic growth are critical drivers for economic risk.
The GDP of United Kingdom is 3186.86 bn. USD (2021), growing by 7.44% per year.
In terms of the size of its economy, United Kingdom ranks #6 out of 183 countries and has a large economy.
Having a view at the growth rate, it is ranked #38 out of 183 countries and is therefore considered a fast-growing economy.
GDP per capita is 47334 USD, ranking United Kingdom number #22 out of 183 countries. This means the purchasing power of citizens in United Kingdom is high compared to the rest of the world.
You get a more detailed idea of GDP and economic growth in United Kingdom in the table below:
Another significant influencer for the economic risk score is the inflation rate and the interest rates. You get a more detailed idea of monetary KPIs in United Kingdom in the table below:
The inflation in United Kingdom was 2.5% in 2021 which is considered a low inflation rate.
The business environment risk in United Kingdom
Our analysis shows that the business environment risk in United Kingdom is very low (1 out of 6), which is a relatively low risk score in Europe.
Economic freedom and rights has a big influence on the business environment risk in a country. The critical facts for United Kingdom in the table below:
As you can see in the table, the property rights index is 88 in United Kingdom, which is considered quite good in Europe.
The business freedom index is based on 10 indicators, using data from the World Bank’s Doing Business study. The Index is 94 in United Kingdom, a good score for a country in Europe.
United Kingdom's overall economic freedom index is 78 out of 100 and is based on factors such as the rule of law, regulatory efficiency, and market openness.
The political risk in United Kingdom
The political risk in United Kingdom is very low, with a score of 1/6. This is a low political risk score in Europe.
The governance and political stability indicators are critical drivers for political risk. An overview of United Kingdom can be seen in the table below:
The rule of law index analyses to which extent agents have confidence in and abide by the rules of society, in particular the quality of contract enforcement, property rights, the quality of the courts, and the police's ability to enforce court orders.
When trading with businesses in a country, the rule of law index is critical as it describes your ability to enforce commercial contracts.
In United Kingdom, the rule of law index is at 1.43 points, with the score going from -2.5 (weak) to 2.5 (strong). United Kingdom has, therefore, a very high rule of law index, which means you have a very good chance of enforcing your contracts. If your individual customers have good creditworthiness, you should therefore feel relatively safe when providing credit.
Other drivers for the very low political risks are the strong control of corruption, the weak political stability index, and the small shadow economy that is 8.32% of United Kingdom's GDP.
The commercial risk in United Kingdom
In United Kingdom, the commercial risk score is 2/4, which in our model is a low score. This low commercial risk score is relatively low compared to the average in Europe.
The commercial risk is impacted by a country's international trade relationships. You can see some of the key facts for United Kingdom in the table below:
United Kingdom has a total of foreign exchange reserves of 194.18 bn. USD.
United Kingdom has a negative trade balance of -1.26% of GDP. This means that United Kingdom imports more goods and services than the country exports.
The annual growth of exports of goods and services has been growing -1.29% annually - now 26.99% of GDP. Import of goods and services represents 28.25% of the GDP in United Kingdom.
The financing risk in United Kingdom
We have calculated the financing risk to be 2/4, which equals a low risk. A low financing risk score is pretty average for countries in Europe.
The country's banking system, efficiency, and stability influence the financing risk. Additional facts and info can be found for United Kingdom in the table below:
In United Kingdom, the credit information sharing index is 8 on a scale from 0 (low) to 8 (high). The result of this, is that the access and trustworthiness of the credit information in United Kingdom is high.
This makes it easy for you to understand the credit risk of your counterpart in United Kingdom. You should therefore be able to find a good local credit rating agency that can help you analyse the creditworthiness of your specific customers.
Your juridical rights as a creditor are 7 out of 12 and, therefore, medium.
UK Debt Collection FAQs
The debt collection process in the United Kingdom involves multiple steps, typically beginning with amicable collection through reminders sent via various communication channels. If unsuccessful, the next steps may include surveillance, legal collections, and debt enforcement. Legal procedures can vary depending on the size of the claim, with simplified procedures available for debts under 5,000 euros in most EU countries. Debitura can assist with all three steps and offers free quotes from debt collection partners in Europe.
The debt collection process in the United Kingdom typically happens in three steps: pre-legal collection, legal debt collection, and debt enforcement. During pre-legal collection, friendly reminders are sent to the debtor to encourage payment or acknowledgement of the debt. If unsuccessful, legal action may be taken or debt surveillance may be employed. If the debt is confirmed, debt enforcement can be initiated with the help of a bailiff. At Debitura, we can assist with all three steps in the debt collection process in the United Kingdom.
Legal options for debt collection in the United Kingdom include civil lawsuits, debt enforcement, and insolvency proceedings. If the debt is disputed, a civil lawsuit is required. Legal actions require a local lawyer. In the event of insolvency, procedures such as the Moratorium and Company Voluntary Arrangement (CVA) can be initiated to manage and distribute debtor assets to creditors. Legal fees vary based on the size and complexity of the claim, and you can compare prices of different attorneys using Debitura.
The cost of debt collection in the UK varies depending on the case, but Debitura offers a no-cure-no-pay model for pre-legal collection with a success fee between 10-20%. Legal actions' price may vary depending on your case, but we can provide you with 3 quotes from the best debt collection lawyers in the UK.
The duration of the debt collection process in the United Kingdom depends on the debtor and the specific case circumstances. Generally, if the case can be handled during the pre-legal phase, the process can take anywhere from 3 to 6 months. However, if legal action is needed to collect the debt, the process typically takes between 12 to 18 months.